april 2019 edition - sure dividend · 6 return to top 10 list the retirement top 10 – april 2019...

Sure Retirement Newsletter

HIGH-YIELD, HIGH-QUALITY INVESTMENTS

April 2019 Edition

By Ben Reynolds, Nick McCullum, Bob Ciura, Josh Arnold, & Samuel Smith

Edited by Brad Beams

Published on April 14th, 2019

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Table of Contents Opening Thoughts - Is It In Your Best Interest To Rely On Social Security In Retirement?3

Sell Recommendation: AmeriGas Partners (APU) ................................................................... 4

Sell Recommendation: TC Pipelines LP (TCP) ........................................................................ 5

The Retirement Top 10 – April 2019........................................................................................... 6

Analysis of Top 10 Securities ....................................................................................................... 7

AbbVie Inc. (ABBV) .................................................................................................................. 7

Tanger Factory Outlet Centers Inc. (SKT) ................................................................................. 9

Cardinal Health Inc. (CAH) ...................................................................................................... 11

Invesco Ltd (IVZ) ..................................................................................................................... 13

WestRock Co. (WRK) .............................................................................................................. 15

AT&T Inc. (T) .......................................................................................................................... 17

Energy Transfer LP (ET) .......................................................................................................... 19

Altria Grp. Inc. (MO) ................................................................................................................ 21

International Business Machines Corp. (IBM) ......................................................................... 23

People’s United Financial Inc. (PBCT) .................................................................................... 25

Closing Thoughts - Why We Do Not Use The Dividend Discount Model - ........................... 27

List of Stocks by Retirement Suitability Score......................................................................... 28

List of Stocks by Sector .............................................................................................................. 33

Past Recommendations, Ranking Criteria, & Sells ................................................................. 39

Ranking Criteria ........................................................................................................................ 39

Sell Rules .................................................................................................................................. 39

Current Holds ............................................................................................................................ 40

Sold Positions............................................................................................................................ 41

Pending Sells ............................................................................................................................. 41

Buying & Ranking Criteria ....................................................................................................... 42

Portfolio Building Guide ............................................................................................................ 43

Examples ................................................................................................................................... 43

Tax Guide .................................................................................................................................... 44

Corporations .............................................................................................................................. 45

Master Limited Partnerships (MLPs)........................................................................................ 46

Real Estate Investment Trusts (REITs)..................................................................................... 47

Business Development Companies (BDCs) ............................................................................. 48

Glossary of Common Terms & Acronyms ............................................................................... 49

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Return to Top 10 List

Opening Thoughts - Is It In Your Best Interest To Rely On Social

Security In Retirement? - Many Americans are planning on relying on Social Security benefits to generate passive income during

retirement. At the same time, many of our Sure Retirement subscribers are either in or near retirement.

They have questions about when they should draw Social Security and how it will impact their

financial plan in the future. With this in mind, this month’s Opening Thoughts is dedicated to

explaining the Social Security system and helping investors decide whether or not it should be counted

on as an income source in retirement.

The Social Security system was created in 1933 (the final bill was only passed in 1935) under the

Franklin D. Roosevelt administration, and was designed to be a safety net for Americans – particularly

those with a lack of financial support during their golden years. Today, more than 66 million people

receive Social Security (or a related program called Supplemental Security Income). Other data shows

that 61% of surveyed retirees generate a “majority” of their income from Social Security, while one-

third rely on this program for 90% or more of their income.1

These statistics may seem encouraging. Shouldn’t we be glad that so many U.S. citizens are

benefitting from this government program? On the surface, this may be true; however, the actual

amount that retired workers receive as a part of this program is far less than many citizens may expect.

According to research performed by MarketWatch:

“The average monthly retirement benefit under the Old-Age and Survivors Insurance was $1,326,

according to the Social Security Administration. Retired workers received an average of $1,371 while

spouses of retired workers received $714 and children of retired workers received $659.”

Looking ahead, the benefits are actually expected to worsen and potentially disappear over time. In the

Social Security Administration’s 2018 annual report2, the organization wrote the following:

“Under the Trustees’ intermediate assumptions, OASDI cost is projected to exceed total income

throughout the projection period, and the dollar level of the hypothetical combined trust fund reserves

declines until reserves become depleted in 2034.”3

Given this dire outlook, we believe that investors should ignore any potential Social Security benefits

while creating a financial plan for retirement. This is the most conservative choice, and means that if

Social Security benefits are realized, the investors’ financial situation will be more comfortable than

expected (an excellent outcome, all things considered).

The Social Security system is complicated, and this brief piece is not intended to have all the answers

for every investor. If you are interested in learning more about how the Social Security system will

impact your retirement, you can sign up for an account to view your Social Security Statement (with

estimates of your future retirement benefits) at https://www.ssa.gov/myaccount.

1 This data came from research published by MarketWatch. 2 Which is officially called “The 2018 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and

Federal Disability Insurance Trust Funds.” 3 Emphasis ours.

https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/

https://www.ssa.gov/myaccount

https://www.marketwatch.com/story/this-is-why-you-shouldnt-count-on-social-security-2017-10-27

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Sell Recommendation: AmeriGas Partners (APU)

AmeriGas Partners recently announced (4/2/19) that its parent company UGI Corporation (UGI) will

acquire AmeriGas Partners.

Due to the pending acquisition, we are issuing a sell recommendation AmeriGas Partners (APU).

We first recommended AmeriGas Partners in the January 2017 edition of The Sure Retirement

Newsletter. Since that time AmeriGas has generated total returns of -8.1%4 versus 34.4% for the S&P

500 (as measured by the ETF SPY).

Our AmeriGas Partners recommendation has worked out poorly, significantly underperforming the

S&P 500.

The reason for this underperformance is largely due to unit price changes. AmeriGas Partners did not

reduce its dividend since we recommended it. When we recommended the security in January of 2017,

it had a high yield of 7.9%. Today that yield is 10.8%, showing that the price has declined

significantly.

The share price decline was not fully supported by underlying business results. In fiscal 2016,

AmeriGas Partners generated EBITDA per unit of $6.06. This declined to $5.57 in fiscal 2017 but

rebounded to $6.51 in fiscal 2018. Said another way, the business grew modestly since our

recommendation. We expected long-term growth of 3% to 4% annually, and AmeriGas Partners

generated EBITDA/unit growth of 3.6% annually from fiscal 2016 through fiscal 2018.

AmeriGas Partners is clearly undervalued in our view. It also offers excellent expected total returns

ahead due to its high yield and undervaluation. And that’s likely why AmeriGas’ parent company is

acquiring them – it’s an absolute bargain.

Under the terms of the acquisition, AmeriGas shareholders will receive 0.5 shares of UGI and $7.63 in

cash per unit of AmeriGas. AmeriGas’ quarterly $0.95 distribution will continue to be paid until the

merger closes. The transaction is expected to close in the 4th quarter of fiscal 2019.

AmeriGas’ share price is now tied to the UGI Corporation and UGI offers a mediocre 2.0% yield. We

expect UGI to grow at just under 7% annually. Additionally, we view UGI as overvalued at current

prices. All told, we expect middling total returns of just ~4% annually from UGI.

Normally, investors can get ‘paid to wait’ when holding undervalued securities with high yields. That

is no longer the case at AmeriGas due to the UGI acquisition. As a result, we recommend that

investors sell their AmeriGas units and reinvest the proceeds into one of our top 10 recommendations

for this month.

4 Return data for this sell report is from the morning of 4/12/19.

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Sell Recommendation: TC PipeLines (TCP)

We first recommended TC PipeLines in the December 2016 edition of The Sure Retirement Newsletter.

In the May 2018 edition of The Sure Retirement Newsletter we issued a pending sell recommendation

on TC PipeLines.

We recommended selling TC PipeLines when it reached its historical average dividend yield of 7.1%.

The security has done so, and now moves from a pending sell to a final sell recommendation. An

abridged analysis from our May 2018 pending sell recommendation is given below to aid in

understanding why the security was a pending sell:

TC PipeLines is reducing its quarterly distribution payment from $1.00/share to $0.65/share; a

35% decline.

The distribution cut was announced at the same time as the company’s first quarter earnings, on

May 2nd. The partnership’s distributable cash flow per share grew 16.8% versus the same quarter

a year ago. Robust growth is not typically a cause for a distribution reduction.

The reason TC PipeLines elected to reduce its distribution is because of a recent Federal Energy

Regulatory Commission (FERC) ruling. The new ruling does not allow for income tax recovery in

certain cases for pipelines.

The ruling will seriously impact TC PipeLines’ operations. The partnership is expecting revenue to

decline by approximately $100 million. This is significant given that the company generated $425

million in revenue over the last 12 months. The TC PipeLines dividend cut will save the

partnership roughly the amount of money the FERC ruling will cost it.

Because TC PipeLines cut its distribution, we recommend selling TC PipeLines when the time is

right. Now is not that time. The partnership still has a robust 10.1% distribution yield after

accounting for the recent reduction. For comparison, the partnership’s historical average yield

over the last decade is around 7.0%. TC PipeLines is currently undervalued.

From the time of our pending sell recommendation to now, TC PipeLines has returned 50.9%,

versus 8.3% for the S&P 500. This strong performance highlights the importance of selling around

fair value rather than immediately after a negative event occurs.

Pessimism around TC PipeLines was highest just after its distribution reduction. It was a poor time

to sell. But the security has rebounded and is now trading around its historical average fair

valuation multiple. As a result, we recommend selling TC PipeLines now.

While TC PipeLines performed well after its distribution reduction, this investment performed

poorly overall, generating total returns of -15.6% since we first recommended it in the December

2016 edition of The Sure Retirement Newsletter, versus 37.7% total returns for the S&P 500. The

reason for the poor performance was largely due to the distribution reduction caused by the

unanticipated FERC ruling.

We recommend investors reinvest the proceeds from the sale of TC PipeLines into any of our Top

10 from this month. Energy Transfer (ET) is an especially good substitute as it operates in the

same industry as TC PipeLines and pays a slightly higher yield than TC PipeLines currently has.

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The Retirement Top 10 – April 2019

Name Type Price Fair

Value P/E Yield Payout Growth

AbbVie (ABBV) Stock $81 $113 9.5 5.2% 49% 9.5%

Tanger Factory Outlet (SKT) REIT $20 $28 8.85 7.0% 63%6 5.0%

Cardinal Health (CAH) Stock $47 $71 9.3 4.1% 39% 5.0%

Invesco (IVZ) Stock $21 $26 8.9 5.8% 51% 5.0%

WestRock (WRK) Stock $40 $54 9.0 4.7% 42% 4.0%

AT&T (T) Stock $32 $43 8.9 6.3% 57% 2.1%

Energy Transfer (ET) MLP $16 $18 7.07 7.9% 60%8 3.0%

Altria Group (MO) Stock $56 $64 14.2 5.8% 80% 4.0%

IBM (IBM) Stock $144 $178 10.3 4.4% 58% 3.0%

People’s United (PBCT) Stock $17 $19 11.6 4.2% 48% 5.0%

Notes: The ‘Price’ column shows a recent price of the security. The ‘Fair Value’ column shows our estimate

of the company’s per-share fair value. The ‘P/E’ column typically uses forward earnings-per-share, FFO-per-

share, or DCF-per-share, depending on the security type. The ‘Payout’ column uses earnings, funds from

operations (FFO), or distributable cash flow (DCF) in the denominator. The numerator is the security’s

payment to its owners. The ‘Growth’ column shows our estimate of growth on a per share (or per unit) basis;

these estimates typically come from Sure Analysis Research Database reports.

Disclosures: Ben Reynolds is personally long the following from this month’s Top 10: ABBV, CAH, T, & ET.

Nick McCullum is personally long CAH & T. Bob Ciura is personally long MO.

Three recommendations changed from last month’s Top 10. Enterprise Product Partners (EPD),

Western Union (WU), and Newell Brands (NWL) were replaced by Tanger Factory Outlet Centers

(SKT), Cardinal Health (CAH), and People’s United Financial (PBCT). Tanger (SKT) is a first-

time recommendation. Remember: Securities that fall out of the Top 10 are holds, not sells.

The ranking criteria for the Top 10 list and requirements for inclusion in The Sure Retirement

Newsletter are derived from and The Sure Analysis Research Database.

An equal-weighted portfolio of the Top 10 has the following characteristics:

Payout Ratio: 55%

Dividend or Distribution Yield: 5.5%

Growth Rate: 4.6%

Note: Data for this newsletter was obtained between market close 4/9/19 through mid-morning 4/12/19.

5 Using price-to-AFFO (P/AFFO). 6 Using AFFO. 7 Using price-to-distributable-cash-flow (P/DCF). 8 Using distributable cash flow (DCF).

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Analysis of Top 10 Securities AbbVie Inc. (ABBV)

Overview & Current Events

AbbVie is a pharmaceutical company focused on Immunology, Oncology, and Virology. AbbVie was

spun off by Abbott Laboratories in 2013 and trades with a market capitalization of ~$123 billion. The

reason for the spin-off was that Abbott wanted AbbVie to have its own dedicated management team

and ability to focus entirely on its own strategic initiatives. The decision has certainly paid off for

investors, as AbbVie has generated compound annual revenue growth of 11.7% and adjusted EPS

growth above 20% per year since the spin-off.

AbbVie generates annual revenue in excess of $32 billion. Its most important product by far is

Humira, which alone represents ~60% of the company’s annual revenue.

Growth Prospects & Safety

AbbVie’s share price has fallen over 10% in the past 12 months. Investors appear to be concerned over

AbbVie’s future growth, in light of the threats facing Humira. Humira is facing biosimilar competition

in Europe, and AbbVie has had to significantly cut prices to retain business. On the company’s recent

quarterly earnings call, CEO Rick Gonzalez acknowledged that discounting in Europe has been "on the

higher end" of what the company expected, with Humira prices being slashed from 10%-80%

depending on the country. Humira will face biosimilar competition in the U.S. starting in 2023.

Fortunately, AbbVie continues to perform well, and the company has a plan to continue on a growth

trajectory. AbbVie reported fourth quarter revenue of $8.3 billion, up 7.4% from the fourth quarter of

fiscal 2017. AbbVie is seeing growth outside Humira, including 42% growth for another potential

blockbuster drug Imbruvica. Earnings-per-share increased 28% in the fourth quarter, and 41% in 2018.

For the upcoming year, AbbVie expects earnings-per-share in a range of $8.65 to $8.75.

AbbVie operates with strong safety metrics. It has a manageable level of debt, with an interest

coverage ratio above 9.0x for 2018. The company also has a dividend payout ratio of 49%, which

indicates a secure dividend with room for continued increases even if earnings stall temporarily.

Valuation

Based on expected earnings-per-share of ~$8.70, AbbVie stock trades for a price-to-earnings ratio of

9.5. Our fair value estimate for AbbVie is a price-to-earnings ratio of 13.0, indicating the stock is

significantly undervalued today. An expanding valuation multiple could boost shareholder returns by

approximately 6.5% per year if the stock valuation expands to our fair value estimate over the next five

years. In addition, we expect annual earnings growth of 9%-10% through 2024. Lastly, the stock has a

current dividend yield of 5.2%, a very high yield resulting from both a declining share price and the

company’s high rate of dividend growth. In total, we expect annual returns of 21.2% per year over the

next five years, making AbbVie one of our highest-ranking stocks in terms of expected return.

Key Statistics, Ratios, & Metrics

Dividend Yield: 5.2% 10-Year Dividend Growth Rate: 17.8%9

Most Recent Annual Div. Increase: 50.7% Sector: Health Care

Dividend History: Increasing since 2013 Business Type: Corporation

Ex- Dividend Date: 7/12/19 (est.) Payment Date: 8/15/19 (est.)

Fair Value: $113 Payout Ratio: 49.2%

9 Since 2013 spin-off.

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Tanger Factory Outlet Centers Inc. (SKT) Overview & Current Events

Tanger Factory Outlet Centers is one of the largest owners and operators of outlet centers in the United

States and Canada. SKT operates and owns, or has a stake in, a portfolio of 44 upscale outlet shopping

centers, totaling 15.3 million square feet across 22 U.S. states and Canada. The company leases over

3,100 stores that are operated by over 530 different tenants and frequented by more than 189 million

shoppers every year. SKT is headquartered in Greensboro, North Carolina and has a market

capitalization of $1.9 billion. Tanger Outlet centers are known for their tenant mix comprised of

leading designer and brand-name manufacturers. Each outlet center allows customers to purchase a

variety of brand-name products directly from the manufacturer for big savings since manufacturers are

able to charge customers lower prices for their products by eliminating the third-party retailer.

SKT released fourth quarter results on February 13 and announced adjusted funds from operations

(AFFO) of $0.64 per share, compared to $0.66 per share in Q4 2017. AFFO for the full year was $2.48

per share, compared to $2.46 per share for full year 2017. Although SKT maintained its high portfolio

occupancy at 96.8% by the end of 2018, this was still a year-over-year decline from the 97.3% level at

the end of 2017. Portfolio net operating income (NOI) for the consolidated portfolio increased 0.4%

for the quarter and 0.9% for the year.


SKT’s main focus this year is on leasing and marketing their properties as they attempt to offset the

impacts on AFFO from previous rent adjustments and tenant bankruptcies and keep their properties full

and fresh. Management also recently announced a future project in Nashville, Tennessee. We estimate

that AFFO/share growth will slow slightly from its 5.7% half-decade average, given the current trend

towards e-commerce; and compound instead at 5.0% over the next 5 years. Similarly, we estimate that

dividend growth will slow, coming in at 6% over the next 5 years since the low payout ratio (63%) and

flexible balance sheet (BBB+ credit rating) leave plenty of room for payout growth.

Additionally, given management’s track record of success spanning nearly four decades and the fact

that SKT went through the Great Recession virtually unscathed (AFFO fell only 2.2% from 2008 to

2010 and the dividend continued to grow each year), we view it as a conservative investment.

Valuation

Over the last 5 years, SKT has traded at an average P/AFFO of 13.5 and the 10-year average multiple is

15.9. The current P/AFFO of 8.8 based on 2019’s estimated AFFO, represents a 35% discount to the

5-year average P/AFFO and an even larger one relative to the past decade. We believe that, over time,

SKT’s multiple will expand closer to its average, but remain a bit lower at ~12 times AFFO, resulting

in valuation gains of 6.4% annually due to multiple expansion. The dividend yield, meanwhile, has

been pushed to highs lately as the stock price has fallen and now stands at ~7% (~260 basis points

higher than its 5-year average). Combined with our projected AFFO/share growth rate of 5%, we

believe that SKT will generate annualized total returns of 18.4% over the next half decade.


Dividend Yield: 7.0% 10-Year Dividend Growth Rate: 6.4%

Most Recent Annual Dividend Increase: 2.2% Sector: Real Estate

Dividend History: Increasing since IPO (1993) Business Type: REIT

Ex-Dividend Date: 4/29/19 Payment Date: 5/15/19

Fair Value: $28 Payout Ratio: 63%

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Tanger Factory Outlet Centers Inc. (SKT) Dividend Yield History

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Cardinal Health Inc. (CAH)


Cardinal Health is one of the largest healthcare product distributors in the U.S., along with McKesson

(MCK) and AmerisourceBergen (ABC). Cardinal Health’s core business is pharmaceutical

distribution. It also has a medical products distribution segment. The company has operations in over

46 countries with approximately 50,000 employees.

In early February (2/7/19) Cardinal Health released financial results for the fiscal 2019 second quarter.

Cardinal Health reported quarterly revenue of $37.7 billion, a 7% increase compared to the same

quarter last year. Adjusted earnings-per-share totaled $1.29, down 15% from the same quarter a year

ago. Both operating segments posted 14% declines in operating profit for the quarter. However,

Cardinal Health raised its adjusted earnings-per-share guidance for fiscal 2019, to $4.97 to $5.17 (from

$4.90 to $5.15 previously).


Cardinal Health’s primary growth catalyst is the aging U.S. population. Rising life expectancies and a

very large population of seniors mean demand for healthcare products should only grow in the U.S.

going forward. Acquisitions have helped Cardinal Health pursue these growth opportunities. For

example, in 2017 Cardinal Health acquired the Patient Recovery business from Medtronic (MDT) for

$6.1 billion, which is expected to add $0.55 to Cardinal Health’s earnings-per-share in fiscal 2019.

The pharmaceutical distribution industry is challenged right now, but we still view Cardinal Health

positively. Our bullish view is based on the company’s entrenched position in the industry, as well as

the expected growth of the U.S. healthcare industry. Cardinal Health serves over 26,000 pharmacies

and nearly 85% of hospitals in the U.S. The company generated $137 billion of revenue in the most

recent fiscal year. This kind of scale is very hard to replicate.

Cardinal Health is a safe dividend stock. To begin, the company has increased its dividend for 32

consecutive years, which qualifies it to be a member of the Dividend Aristocrats Index. In addition,

Cardinal Health is on pace for a dividend payout ratio of just 39% in fiscal 2019, which gives it plenty

of room to continue increasing its dividend if earnings growth stalls temporarily. Lastly, Cardinal

Health is resistant to recessions. Pharmaceutical and medical products enjoy steady demand from year-

to-year, even during economic downturns, as people will always need their pharmaceutical products

and medical supplies no matter how the broader economy is doing.

Valuation

Cardinal Health stock trades for a price-to-earnings ratio of 9.3, based on expected earnings-per-share

of $5.07 for fiscal 2019. Our fair value estimate for the stock is a price-to-earnings ratio of 14.0,

meaning the stock is significantly undervalued. Valuation changes could add 8.5% per year to

shareholder returns. In addition, we expect Cardinal Health to grow earnings-per-share by 5.0% per

year. Adding in the 4.1% dividend yield, total expected returns could reach 17.6% per year for

Cardinal Health stock over the next five years.



Most Recent Annual Dividend Increase: 3.0% Sector: Health Care

Dividend History: 32 years of increases Business Type: Corporation

Ex- Dividend Date: 6/29/19 (est.) Payment Date: 7/15/19 (est.) Fair Value: $71 Payout Ratio: 38.8%

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Cardinal Health Inc. (CAH) Dividend Yield History

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Invesco Ltd (IVZ)


Invesco is a global investment management firm. It has more than 7,000 employees and serves customers in more than 150 countries. Invesco trades with a market capitalization of $8.4 billion and has $955 billion of assets under management (AUM).

On January 30th, 2019, Invesco reported financial results for the fourth quarter of fiscal 2018. In the quarter, the company generated revenues of $919 million, which represents a steep 8.2% decline over the same period a year ago. This troubling revenue decline was based on reductions in the company’s assets under management, which totaled $924 billion at the end of the fourth quarter – 0.7% less than its AUM in last year’s comparable period, and 6.2% less than the end of 2018’s third quarter. The AUM decline is attributable to a combination of net market losses due to the equity market selloff that occurred in the fourth quarter of 2018, as well as $20 billion of net client outflows. This decline in AUM appears to have stopped as Invesco reported $955 billion at the end of March.

On the bottom line, Invesco generated earnings-per-share of $0.44 during the fourth quarter, which was 40% less than Invesco’s earnings-per-share during the previous year’s quarter. The tremendous hit to the company’s bottom line was the result of lower revenues and a contraction in the company’s margins. The markets seemed generally disappointed in Invesco’s earnings release.

Invesco reported March AUM of $955 billion, up 1% from the previous month. AUM grew thanks to strong market returns and reinvested distributions, partially offset by foreign exchange and net long-term outflows.

Growth Prospects & Safety Invesco is investing heavily in growth, mainly through acquisitions. The company is acquiring OppenheimerFunds for ~$5.7 billion. The deal is for $4 billion in preferred shares and 81.9 million Invesco shares. This acquisition is expected to close in the second quarter of 2019 and boost earnings-per-share by ~18% in 2019. Earlier this year, Invesco acquired the ETF business from Guggenheim Investments for $1.2 billion. Invesco also made a significant investment in financial technology with its acquisition of Intelliflo, a leading technology platform for financial advisors that supports approximately 30% of all financial advisors in the U.K. Overall, we conservatively expect 5% earnings growth annually for Invesco over the next five years.

Invesco ranks well in terms of dividend safety with an expected payout ratio of 51% for fiscal 2019. Invesco also has a strong balance sheet, with a credit rating of ‘A’ from Standard & Poor’s.

Valuation Invesco stock trades for a price-to-earnings ratio of 8.9 based on expected earnings-per-share of $2.34 for 2019. We believe a fair valuation for Invesco is a price-to-earnings ratio of 11. This gives us a fair value target of $26 for this asset management business. A rising valuation could add approximately 4.4% to the annual returns of the stock if mean reversion were to occur over the next 5 years. In addition, returns will benefit from earnings growth (5%), as well as the 5.8% dividend yield. In total, we believe Invesco could potentially deliver total returns of 15.2% per year over the next 5 years.

Key Statistics, Ratios, & Metrics Dividend Yield: 5.8% 10-Year Dividend Growth Rate: 11.6%

Most Recent Annual Dividend Increase: 3.4% Sector: Financial Dividend History: Increasing since 2009 Business Type: Corporation Ex-Dividend Date: 5/10/19 (est.) Payment Date: 6/1/19 (est.) Fair Value: $26 Payout Ratio: 51%

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Invesco Ltd. (IVZ) Dividend Yield History

15


WestRock Co. (WRK)


WestRock Company was formed in July 2015 by the merger of Rock-Tenn and MeadWestvaco.

Today, it is a leading provider of paper and packaging solutions. It operates two major segments:

Corrugated Packaging (55% of revenue) and Consumer Packaging (45% of revenue). WestRock has a

market capitalization of $9.8 billion.

WestRock reported fiscal 2019 first quarter results on January 31st, 2019. Net sales increased 14.5%

for the quarter, mainly due to a recent acquisition as well as a favorable product mix. However,

adjusted earnings-per-share declined 4.6% for the quarter, as revenue growth was more than offset by

cost inflation and a negative impact on production caused by hurricanes.

WestRock completed the acquisitions of KapStone Paper and Packaging Corp. during the quarter and

has already integrated the company into existing operations. This acquisition helped drive a $400+

million net sales increase in the corrugated packaging segment. Management believes it can drive

$200 million in synergies by the end of fiscal 2021 from the $4.9 billion acquisition.


WestRock will pursue future growth both organically and with acquisitions. The acquisition of

KapStone enhanced WestRock’s product offerings and geographical reach. However, it also saddled

WestRock with higher debt. The deal increased WestRock’s net-debt-to-EBITDA ratio to 3.9x. The

company has set a goal to reduce the leverage ratio to a range of 2.25x to 2.50x this year.

Debt reduction will help improve WestRock’s dividend safety, and cost cuts will help achieve

deleveraging. Integration synergies are expected to produce $200 million in annual cost reductions by

2021. Assuming WestRock achieves its debt reduction goal, the dividend appears secure. WestRock

has an expected dividend payout ratio of 42% for fiscal 2019. This should provide enough room for

modest dividend increases to continue in the years ahead. The stock’s yield is already very high at

4.7% as well.

Valuation

WestRock is expected to generate earnings-per-share of $4.35 for 2019. Based on this, the stock trades

for a price-to-earnings ratio of 9.0. Since the 2015 merger, WestRock shares have held an average

price-to-earnings ratio of 16.8; however, our fair value estimate is a price-to-earnings ratio of 12.5.

Our fair value estimate is based on the company’s elevated debt and challenged earnings growth.

Still, shares of WestRock appear to be significantly undervalued, and an expansion of the price-to-

earnings ratio could boost annual returns by 6.9% per year over the next five years. In addition, we

expect the company to report 4.0% annual earnings growth through 2024. Lastly, the stock has a

current dividend yield of 4.7%. In total, we expect annual returns of 15.6% per year for WestRock

over the next five years.


Dividend Yield: 4.7% 10-Year Dividend Growth Rate: 5.7%10

Most Recent Annual Dividend Increase: 5.8% Sector: Consumer Goods

Dividend History: Increasing since 2016 Business Type: Corporation

Ex-Dividend Date: 5/3/19 (est.) Payment Date: 5/14/19 (est.)


10 Since the 2015 merger.

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WestRock Co. (WRK) Dividend Yield History

17


AT&T Inc. (T) Overview & Current Events

AT&T is one of the largest telecommunications companies in the United States when measured by

market capitalization ($232 billion). Its only competitor of similar size is Verizon Communications

($242 billion).

In late January, AT&T reported (1/30/19) fourth quarter and full year 2018 results for the period ending

December 31st, 2018. For the fourth quarter, the company generated $48.0 billion in revenue, up

15.2% from the year ago period, primarily driven by the Time Warner acquisition. Adjusted earnings-

per-share totaled $0.86 against $0.78 previously. For the year, AT&T reported revenue of $170.8

billion, up 6.4% as compared to 2017. Adjusted earnings-per-share came in at $3.52 versus $3.05 in

2017, again driven by the acquisition, along with lower tax rates associated with tax reform.

AT&T also provided its outlook for 2019. The company anticipates free cash flow to be in the $26

billion range, with low single-digit adjusted EPS growth. The dividend payout ratio is anticipated to be

below 60% and end-of-year net debt to adjusted EBITDA in the 2.5x range.


AT&T’s biggest growth catalyst is its $85 billion acquisition of Time Warner Inc., a content giant that

owns multiple media brands, including TNT, TBS, CNN, and HBO. Time Warner also owns a movie

studio as well as sports rights across the NFL, NBA, MLB, and NCAA. AT&T has made additional

bolt-on acquisitions to boost its growing content businesses as well and is working to maximize the

advertising capacity of its content. We are conservatively anticipating annualized earnings-per-share

growth of ~2% per year for the foreseeable future.

AT&T scores extraordinarily well in terms of dividend safety, particularly relative to the company’s

exceptionally high yield. To start, the company has increased its dividend for 35 consecutive years,

which qualifies it to be a member of the Dividend Aristocrats Index. Separately, AT&T is on pace for

a dividend payout ratio of just 57% in the ongoing fiscal year. While some investors have expressed

concerns with AT&T’s debt, the company reported a more-than-adequate interest coverage ratio of

3.3x in fiscal 2018 (composed of $26.1 billion of operating income and $8.0 billion of interest

expense). Importantly, AT&T plans to deleverage significantly over the next several years.

Valuation

AT&T’s management team expects the company to generate adjusted earnings-per-share of about

$3.60 in fiscal 2019. Using this earnings estimate, the company is trading at a price-to-earnings ratio

of just 8.9. AT&T traded at an average price-to-earnings ratio of 13.4 over the last decade; we have set

a fair price-to-earnings ratio of 12 for AT&T. If AT&T’s price-to-earnings ratio can expand to our fair

value estimate over the next 5 years, this will boost its total returns by around 6.4% per year during this

time period. Overall, we believe that AT&T is capable of delivering annualized returns of 14.8% per

year from its current price thanks to its high yield (6.3%), earnings growth (2.1%), and compelling

potential for valuation expansion (6.4%).



Most Recent Annual Dividend Increase: 2.0% Sector: Telecommunications




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AT&T Inc. (T) Dividend Yield History

19


Energy Transfer LP (ET) Overview & Current Events

Energy Transfer is an energy Master Limited Partnership (MLP). It is the second-largest midstream

MLP based on market capitalization (behind Enterprise Products Partners) and the largest based on

enterprise value. On October 19th of 2018, Energy Transfer Equity LP (previously ETE) and Energy

Transfer Partners LP (previously ETP) announced the completion of a merger, with ETE acquiring all

of the outstanding units of ETP. The new entity trades with the ticker “ET.” Energy Transfer has a

gathering capacity of 12.8 million Btu/day of gas and a transportation capacity of 22 million Btu/day of

natural gas and 4.3 million barrels per day of oil.

On February 20th, Energy Transfer reported Q4 and 2018 results. The company posted record

Adjusted EBITDA of $2.67 billion (up 29% year-over-year) and Distributable Cash Flow (DCF)

attributable to partners of $1.52 billion (up 29% year-over-year). Meanwhile, the distribution coverage

ratio surged to 1.90x, yielding excess coverage of $716 million of distributable cash flow attributable to

partners in excess of distributions.


Energy Transfer has an attractive lineup of new projects which will fuel the company’s growth. For

example, Energy Transfer announced it will construct a seventh natural gas liquids (NGL) fractionation

facility at Mont Belvieu, Texas, with 150,000 barrels per day of capacity. Fractionator VII is

scheduled to be operational in the first quarter of 2020 and is fully subscribed by multiple long-term

contracts. We expect Energy Transfer to grow distributable cash flow by 3% per year through 2024.

Energy Transfer reported a distribution coverage ratio of 1.9x in the most recent quarter and 1.7x

during fiscal 2018. The latter figure is equivalent to a cash flow dividend payout ratio of 59%. Energy

Transfer’s distribution payments appear secure for the foreseeable future.

In addition, Energy Transfer has been actively paying down debt. Prior to the merger, ETP was able to

reduce its debt-to-adjusted-EBITDA ratio down from 5.5x in the first quarter of 2017 to 4.1x in the

second quarter of 2018. Separately, Moody’s improved the combined entity’s credit rating to Baa3

investment grade (stable) and the partnership has told investors that it anticipates funding the majority

of its growth capex with retained cash flow moving forward.

Valuation

We believe that Energy Transfer is capable of delivering distributable cash flow per share of around

$2.20 in fiscal 2019. Using this estimate, the company is trading at a price-to-DCF ratio of 7.0. We

believe fair value for Energy Transfer is a price-to-DCF ratio of 8, which gives a fair value estimate of

$18. If the company’s valuation multiple expands to a price-to-DCF of 8 over the next five years, this

will boost its total returns by 2.8% per year during this time period.

Energy Transfer trades with an appealing 7.9% distribution yield and the partnership is likely to

compound its per-unit intrinsic value at about 3% per year over full economic cycles. All together, we

believe Energy Transfer can deliver long-term total returns of 13.7% per year over the next 5 years.


Distribution Yield: 7.9% 10-Year Distribution Growth Rate: N/A

Most Recent Annual Distribution Increase: N/A Sector: Energy

Distribution History: N/A Business Type: MLP

Ex-Distribution Date: 5/4/19 (est.) Payment Date: 5/21/19 (est.) Fair Value: $18 Payout Ratio: 60%

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Energy Transfer LP (ET) Dividend Yield History

21


Altria Grp. Inc. (MO)


Altria Group is a tobacco products giant. Its core tobacco business holds the flagship Marlboro

cigarette brand. Altria also has non-smokable brands Skoal and Copenhagen chewing tobacco, Ste.

Michelle wine, and owns a 10% investment stake in global beer giant Anheuser Busch Inbev.

In late January (1/31/19) Altria reported fourth quarter and full year earnings. Revenue net of excise

taxes increased 1.5% to $4.8 billion, missing expectations by $20 million. Adjusted earnings-per-share

of $0.95 increased 4.4% from the same quarter a year ago. Net revenue increased 0.4% in the core

smokable products segment as price increases more than offset the impact of falling shipment volumes.

After adjusting for trade inventory movements, Altria’s cigarette shipment volume declined by 5.5%,

worse than the estimated industry decline of 5.0%. The company managed its earnings growth

primarily due to revenue growth, share repurchases, and a lower tax rate.


Altria has a positive growth outlook although it does face a significant risk in the years ahead; the

declining U.S. smoking rate. In response to this consumer trend, Altria has invested heavily in new

products that appeal to changing consumer preferences. Altria recently announced a $1.8 billion

investment in Canadian marijuana producer Cronos Group. Altria purchased a 45% equity stake in the

company, as well as a warrant to acquire an additional 10% ownership interest in Cronos Group at a

price of C$19.00 per share, exercisable over four years from the closing date. Altria will help Cronos

accelerate its research and development capabilities.

Separately, Altria announced it will invest $12.8 billion in e-vapor manufacturer JUUL Labs for a 35%

equity stake in the company, valuing JUUL at $38 billion. It appears likely from the JUUL investment

that Altria will discontinue its own e-cigarette brand MarkTen. In light of these investments, Altria

announced a cost-cutting program designed to reduce annual expenses by $500 to $600 million.

Altria receives top marks in terms of safety, due to its competitive advantages. It operates in a highly

regulated industry, which significantly reduces the threat of new competitors entering the market. And,

Altria’s products enjoy tremendous brand loyalty, as Marlboro controls more than 40% of U.S. retail

market share. Altria is also highly resistant to recessions. Cigarette and alcohol sales fare very well

during recessions, which keeps Altria’s strong profitability and dividend growth intact.

Valuation

Altria stock trades for a price-to-earnings ratio of 14.2, which is below the 10-year average of 16.2.

Our fair value estimate is now a price-to-earnings ratio of 15.0, a slight reduction in light of Altria’s

most recent quarterly results. Still, Altria stock appears undervalued. An expanding valuation could

boost shareholder returns by 1.1% per year. In addition, we now expect 4% annual earnings growth for

Altria through 2024, down from previous expectations as we acknowledge Altria’s heightened

spending on growth. Nevertheless, Altria has a high dividend yield of 5.8%, and a strong total

expected return of 10.9% per year over the next five years.



Most Recent Annual Dividend Increase: 21% Sector: Consumer Goods

Dividend History: 53 increases in the past 49 years Business Type: Corporation



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Altria Group Inc. (MO) Dividend Yield History

23


International Business Machines Corp. (IBM)


IBM is a large multinational information technology company founded 108 years ago, with a market

capitalization of $128 billion. IBM has six reporting divisions: Cognitive Solutions, Global Business

Solutions, Technology Services & Cloud Platforms, Systems, Global Financing, and Other.

In late January, IBM reported (1/22/19) fourth quarter financial results, delivering a beat on both the

top and bottom lines. Revenue of $21.8 billion beat analyst estimates by $30 million, while adjusted

earnings-per-share of $4.87 beat by $0.05. Revenue declined 3.5% from the same quarter last year,

continuing a concerning trend. Global Business Services and Cognitive Solutions posted revenue

growth of 2% and 6%, respectively. Technology Services & Cloud Platforms were flat for the quarter.

Growth was more than offset by declines of 9% in Global Financing and 20% in Systems. However,

IBM shares rose 4% in after-hours trading following the announcement.

Before that, in late October (10/29/18) IBM announced it will acquire Red Hat Inc. for $190 per share,

representing a total enterprise value of $34 billion. Red Hat generates annual revenue of about $3

billion and operates in the open-source software market, primarily distributing technology products

used in data centers. IBM made the deal to boost its cloud platform, which is one of its most important

growth areas. IBM expects the acquisition will be accretive to earnings within 12 months of closing.


IBM is investing heavily for growth and is finally seeing a return on its investment. IBM’s Strategic

Imperatives, which include the cloud, open source, analytics, and data; collectively grew revenue by

9% in the past 12 months. Total cloud revenue increased 12% to $19.2 billion during that time. Red

Hat will further expand the company’s cloud infrastructure. We expect 3% annual earnings growth

through 2024. There is a good chance IBM can return to growth. The company received the most

patents of any U.S. company in 2018, for the 26th year in a row. IBM received 9,100 patents across

artificial intelligence, cloud computing, and cybersecurity, which are its most promising growth areas.

IBM ranks highly in terms of dividend safety. The company is projected to have a dividend payout of

58% for 2019, which leaves plenty of room for annual dividend increases moving forward. Moreover,

IBM’s interest coverage ratio has consistently exceeded 20x over the last decade. IBM’s credit rating

was cut at S&P Global after the Red Hat acquisition on debt concerns, but the company still maintains

a strong rating of ‘A.’ IBM had $12.2 billion of cash at the end of the fourth quarter.

Valuation

Based on expected earnings-per-share of $13.90 for 2019, IBM stock holds a price-to-earnings ratio of

10.3. Our fair value estimate for IBM is a price-to-earnings ratio of 12.0, a slight discount to its

average price-to-earnings ratio over the past 10 years. If its stock valuation increases to the fair value

estimate, the corresponding multiple expansion would generate annual returns of 3.1% if they occurred

over a 5-year period. In addition, 3% expected annual earnings growth and the 4.4% dividend yield

bring total expected returns to 10.5% per year over the next five years.



Most Recent Annual Dividend Increase: 4.7% Sector: Technology




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International Business Machines Corp. (IBM) Dividend Yield History

25


People’s United Financial Inc. (PBCT)


People’s United Financial is a regional bank and financial services company engaged in real estate and

mortgage lending, equipment financing, consumer loans, life insurance, brokerage services, wealth

management, and traditional banking services. The company has a network of 400+ branches, with

total assets of $48 billion and a market capitalization of $6.6 billion.

In mid-January (1/17/19) the company reported fourth quarter and full year financial results. In the

fourth quarter, People’s United increased its earnings-per-share by 16% from the year-ago quarter,

principally due to the combination of the acquisition of First Connecticut, and a boost from tax reform.

The acquisition helped grow loans and deposits by 9% year-over-year. For the full year, earnings-per-

share increased 26%. People’s United also increased its dividend in 2018 for the 25th consecutive year.

This placed People’s United on the list of Dividend Aristocrats.


People’s United has a positive growth outlook going forward. Acquisitions will help the company

expand its geographic reach and customer base. People’s United Financial recently acquired VAR

Technology Finance, which focuses on serving the technological sector. People’s United Financial

also announced the acquisition of BSB Bancorp in November. Aside from acquisitions, rising interest

rates are a separate growth catalyst for People’s United. During the last two years, People’s United

Financial has greatly expanded its net interest margin, from 2.96% in the 2017 second quarter to 3.17%

in the most recent quarter. We expect 5% annual earnings growth through 2024. The bank also

continues to benefit from higher loan balances thanks to organic and acquired growth.

People’s United is not a recession-resistant company. As a financial services provider, its profits are

highly correlated to economic growth. For example, from 2007-2010, earnings-per-share declined 54%

as the Great Recession took its toll. That said, the company remained profitable throughout, and

continued to increase its dividend through the Great Recession while so many other banks reported

massive losses and cut their dividends. Today, People’s United has a secure dividend. We expect

$1.45 in earnings-per-share in 2019; the current dividend payout stands at $0.70 per share, for a

dividend payout ratio of just 48%.

Valuation

We expect People’s United to generate earnings-per-share of $1.45 for 2019. Based on this, the stock

trades for a price-to-earnings ratio of 11.6. Our fair value estimate is a price-to-earnings ratio of 13.0,

which means the stock is a bit undervalued. A higher stock valuation is warranted due to the

company’s future growth potential and long dividend history. Expansion of the valuation multiple

could boost annual returns by 2.3% through 2024. Combining valuation changes with 5.0% expected

annual earnings growth and the 4.2% dividend yield, we expect total returns of 11.5% per year for

People’s United stock over the next five years.



Most Recent Annual Dividend Increase: 1.4% Sector: Financials


Ex- Dividend Date: 4/30/19 (est.) Payment Date: 5/15/19 (est.) Fair Value: $19 Payout Ratio: 48%

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People's United Financial Inc. (PBCT) Dividend Yield History

27


Closing Thoughts - Why We Do Not Use The Dividend Discount

Model -

The Dividend Discount Model is a valuation technique specifically applicable to dividend-paying

stocks. We are occasionally asked whether we use this technique when assessing the valuations of

marketable securities (we do not). This month’s Closing Thoughts explains why.

To begin, what exactly is the Dividend Discount Model? It is a valuation technique rooted in the

following equation:

𝐹𝑎𝑖𝑟 𝑉𝑎𝑙𝑢𝑒 = 𝑁𝑒𝑥𝑡 𝑌𝑒𝑎𝑟′𝑠 𝐸𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑

𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝑅𝑎𝑡𝑒 − 𝐺𝑟𝑜𝑤𝑡ℎ 𝑅𝑎𝑡𝑒

The model is based on the idea that the fair value of an asset is the sum of the future cash flows

received by the owners of the asset (in this case, the shareholders) discounted back to fair value with an

appropriate discount rate.

An example can help to understand how this tool is used in practice. The simplest case is for a stock

that does not grow its dividend. Imagine a business pays $1.00 in dividends per year forever. How

much would you pay for its stock if you wanted to make a 10% return on your investment every year?

The fair value of this business according to the dividend discount model is $10 ($1 divided by 10%).

Common sense shows this is accurate. A $10 investment that pays $1 every year creates a return of

10% a year – exactly what you required.

Modify this example slightly by subtracting the dividend growth rate from the denominator, and you

can see how this tool can be modified for dividend growth stocks. For instance, if the previous

example is expanded for a perpetual dividend growth rate of 6%, the fair value of the security increases

to $25 – $1 divided by 4% (the difference between the 10% discount rate and the 6% growth rate).

We generally avoid the dividend discount model in our research because it suffers from 4 main

shortcomings. The first shortcoming is that it requires the analyst to value a security into perpetuity.

No business exists forever, but the model assigns a positive value (however small) to dividends paid

infinitely far into the future. While we are believers in long-term investing, we have no confidence in

our ability to make predictions on any topic several decades into the future.

A second problem with the dividend discount model is that it focuses on the discounted cash flows

from an investment but fails to account for the cash flows generated by selling stocks in the future. For

any investor who follows a non-passive strategy, this important factor is ignored entirely.

The third issue is that the dividend discount model does not account for one-time changes in a

company’s payout ratio. A company’s organic dividend growth rate is difficult enough to predict, and

dramatic changes to a company’s capital allocation can lead to even more unpredictability.

The fourth (and final) shortcoming that the dividend discount model suffers from is that it does not

work for non-dividend-paying stocks. While we do not recommend any non-dividend stocks in this

newsletter, this matters when comparing different types of investments to each other.

The next newsletter publishes on Sunday, May 12th, 2019

28


List of Stocks by Retirement Suitability Score

Each of the securities in The Sure Analysis Research Database are grouped according to

Retirement Suitability Score and sorted (from highest to lowest) by Expected Total Returns.

Dividend or distribution yield is included next to each security’s ticker symbol. The Retirement

Suitability Score is a combination of the Dividend Risk Score and the security’s Distribution

or Dividend Yield. You can learn more about how the score is calculated at The Sure Analysis

Glossary.

Note: Check The Sure Analysis Research Database for the most up-to-date Retirement Suitability

Scores and Dividend Yields.

A-Rated Retirement Suitability Stocks 1. Bank OZK (OZK): 2.9%

2. AbbVie Inc. (ABBV): 5.2%

3. Tanger Factory Outlet Centers Inc. (SKT): 7.1%

4. The Bank of Nova Scotia (BNS.TO): 4.9%

5. Cardinal Health Inc. (CAH): 4%

6. Walgreens Boots Alliance Inc. (WBA): 3.2%

7. Invesco Ltd (IVZ): 5.9%

8. Eaton Vance Corp. (EV): 3.4%

9. CVS Health Corp. (CVS): 3.7%

10. WestRock Co. (WRK): 4.7%

11. AT&T Inc. (T): 6.4%

12. Canadian Imperial Bank of Commerce (CM): 5.1%

13. Western Digital Corp. (WDC): 4%

14. Energy Transfer LP (ET): 7.9%

15. Altria Grp. Inc. (MO): 5.8%

16. Hospitality Properties Trust (HPT): 8.2%

17. Enbridge Inc. (ENB): 6.1%

18. The Kraft Heinz Co. (KHC): 4.9%

19. International Business Machines Corp. (IBM): 4.4%

20. People's United Financial Inc. (PBCT): 4.2%

21. Leggett & Platt Inc. (LEG): 3.6%

22. National Bank of Canada (NA.TO): 4.2%

23. T. Rowe Price Grp. Inc. (TROW): 2.9%

24. Community Trust Bancorp Inc. (CTBI): 3.5%

25. Tompkins Financial Corp. (TMP): 2.6%

26. Fortis Inc. (FTS.TO): 3.6%

27. MetLife Inc. (MET): 3.8%

28. Chevron Corp. (CVX): 3.8%

29. Enterprise Products Partners LP (EPD): 6%

30. Federal Realty Inv. Trust (FRT): 3%

31. United Bankshares Inc. (UBSI): 3.6%

32. Archer-Daniels-Midland Co. (ADM): 3.3%

33. Illinois Tool Works Inc. (ITW): 2.7%

34. Johnson & Johnson (JNJ): 2.7%

35. Target Corp. (TGT): 3.2%

36. International Paper Co. (IP): 4.2%

37. Exxon Mobil Corp. (XOM): 4%

38. LTC Properties Inc. (LTC): 5.1%

39. Universal Corp. (UVV): 5.4%

40. Infosys Ltd (INFY): 3%

41. Kimberly-Clark Corp. (KMB): 3.4%

42. Pembina Pipeline Corp. (PPL.TO): 4.6%

43. Emerson Electric Co. (EMR): 2.8%

44. 3M Co. (MMM): 2.7%

45. Genuine Parts Co. (GPC): 2.7%

46. The Coca-Cola Co. (KO): 3.4%

47. Franklin Resources Inc. (BEN): 3%

48. The Procter & Gamble Co. (PG): 2.7%

49. Black Hills Corp. (BKH): 2.8%

50. WEYCO Grp. Inc. (WEYS): 2.8%

51. Consolidated Edison Inc. (ED): 3.5%

B-Rated Retirement Suitability Stocks 1. Micro Focus Intl. plc (MFGP): 4.7%

2. Sunoco LP (SUN): 10.8%

3. AmeriGas Partners LP (APU): 10.8%

4. Newell Brands Inc. (NWL): 6%

5. Ameriprise Financial Inc. (AMP): 2.6%

6. Suburban Propane Partners LP (SPH): 10.5%

7. Vodafone Grp. Plc (VOD): 9.5%

8. Brookfield Property REIT Inc. (BPR): 6.4%

9. Holly Energy Partners LP (HEP): 9.9%

10. HNI Corp. (HNI): 3.2%

11. Caterpillar Inc. (CAT): 2.5%

12. AmerisourceBergen Corp. (ABC): 2.1%

13. Carnival Corp. (CCL): 3.9%

14. Targa Resources Corp. (TRGP): 9.1%

15. Magellan Midstream Partners LP (MMP): 6.4%

16. United Parcel Service Inc. (UPS): 3.4%

17. ABB Ltd (ABB): 4.1%

18. Nordstrom Inc. (JWN): 3.4%

19. Imperial Brands plc (IMBBY): 7.3%

20. BT Grp. plc (BT): 6.5%

21. Total SA (TOT): 5.1%

22. Royal Dutch Shell plc (RDS.B): 5.7%

23. British American Tobacco plc (BTI): 6.7%

24. Whirlpool Corp. (WHR): 3.4%

25. Brookfield Property Partners LP (BPY): 6.4%

26. Imperial Oil Ltd (IMO): 2%

27. MSC Industrial Direct Co. Inc. (MSM): 3%

28. John Wiley & Sons Inc. (JW.A): 3%

29. Royal Bank of Canada (RY.TO): 4%

https://www.suredividend.com/sure-analysis-research-database/

https://www.suredividend.com/procedures-glossary-definitions/


29

30. Omnicom Grp. Inc. (OMC): 3.5%

31. Omega Healthcare Investors Inc. (OHI): 7.3%

32. U.S. Bancorp (USB): 3%

33. Siemens AG (SIEGY): 3.8%

34. HP Inc. (HPQ): 3.3%

35. AGNC Investment Corp. (AGNC): 11.9%

36. 1st Source Corp. (SRCE): 2.4%

37. Kellogg Co. (K): 3.9%

38. Farmers & Merchants Bancorp (FMCB): 1.8%

39. Domtar Corp. (UFS): 3.6%

40. Sanofi (SNY): 4.2%

41. The Kroger Co. (KR): 2.3%

42. Main Street Capital Corp. (MAIN): 6.3%

43. Philip Morris Intl. Inc. (PM): 5.3%

44. Gilead Sciences Inc. (GILD): 3.8%

45. The Toronto-Dominion Bank (TD.TO): 4%

46. Polaris Industries Inc. (PII): 2.6%

47. Eagle Financial Srvcs. Inc. (EFSI): 3.1%

48. Pentair plc (PNR): 1.8%

49. H&R Block Inc. (HRB): 4%

50. Hanesbrands Inc. (HBI): 3.3%

51. Commerce Bancshares Inc. (CBSH): 1.8%

52. HollyFrontier Corp. (HFC): 2.7%

53. Novartis AG (NVS): 3.4%

54. Cummins Inc. (CMI): 2.8%

55. Global Net Lease Inc. (GNL): 11.3%

56. ARMOUR Residential REIT Inc. (ARR): 11.5%

57. Verizon Communications Inc. (VZ): 4.1%

58. W.W. Grainger Inc. (GWW): 1.8%

59. Amgen Inc. (AMGN): 3%

60. PPG Industries Inc. (PPG): 1.7%

61. Carlisle Companies Inc. (CSL): 1.3%

62. Bank of Montreal (BMO.TO): 3.9%

63. General Dynamics Corp. (GD): 2.4%

64. Parker-Hannifin Corp. (PH): 1.7%

65. Lockheed Martin Corp. (LMT): 2.9%

66. Sysco Corp. (SYY): 2.3%

67. Kohl's Corp. (KSS): 3.7%

68. Iron Mountain Inc. (IRM): 6.8%

69. BP plc (BP): 5.5%

70. Occidental Petroleum Corp. (OXY): 4.6%

71. Apple Hospitality REIT Inc. (APLE): 7.3%

72. Phillips 66 (PSX): 3.3%

73. Stanley Black & Decker Inc. (SWK): 1.9%

74. Patterson Companies Inc. (PDCO): 4.7%

75. The Western Union Co. (WU): 4.1%

76. Lowe's Companies Inc. (LOW): 1.7%

77. Everest Re Grp. Ltd (RE): 2.6%

78. Simon Property Grp. Inc. (SPG): 4.5%

79. Urstadt Biddle Properties Inc. (UBA): 5.4%

80. General Mills Inc. (GIS): 3.8%

81. MDU Resources Grp. Inc. (MDU): 3.2%

82. UMB Financial Corp. (UMBF): 1.9%

83. Host Hotels & Resorts Inc. (HST): 4.2%

84. Community Bank System Inc. (CBU): 2.5%

85. ABM Industries Inc. (ABM): 2%

86. Eaton Corp. plc (ETN): 3.5%

87. BCE Inc. (BCE): 5.3%

88. Dover Corp. (DOV): 2%

89. Ventas Inc. (VTR): 5.1%

90. McDonald's Corp. (MCD): 2.4%

91. H.B. Fuller Co. (FUL): 1.3%

92. Edison International (EIX): 3.9%

93. TELUS Corp. (T.TO): 4.4%

94. The Travelers Companies Inc. (TRV): 2.3%

95. QUALCOMM Inc. (QCOM): 4.3%

96. Computer Services Inc. (CSVI): 2.3%

97. The Southern Co. (SO): 4.6%

98. Conagra Brands Inc. (CAG): 3.1%

99. Medtronic plc (MDT): 2.3%

100. Vermilion Energy Inc. (VET): 8.1%

101. Aflac Inc. (AFL): 2.2%

102. The Gorman-Rupp Co. (GRC): 1.6%

103. PepsiCo Inc. (PEP): 3%

104. Sonoco Products Co. (SON): 2.7%

105. RPM Intl. Inc. (RPM): 2.3%

106. AXIS Capital Holdings Ltd (AXS): 2.9%

107. V. F. Corp. (VFC): 2.3%

108. Bed Bath & Beyond Inc. (BBBY): 3.5%

109. Great-West Lifeco Inc. (GWO.TO): 5%

110. UGI Corp. (UGI): 2%

111. W. P. Carey Inc. (WPC): 5.3%

112. Tennant Co. (TNC): 1.4%

113. SJW Grp. (SJW): 1.9%

114. Air Products & Chemicals Inc. (APD): 2.4%

115. Abbott Laboratories (ABT): 1.6%

116. Bemis Co. Inc. (BMS): 2.3%

117. The Clorox Co. (CLX): 2.5%

118. Nucor Corp. (NUE): 2.7%

119. Walmart Inc. (WMT): 2.2%

120. Hormel Foods Corp. (HRL): 2%

121. PPL Corp. (PPL): 5.2%

122. National Retail Properties Inc. (NNN): 3.8%

123. Colgate-Palmolive Co. (CL): 2.5%

124. Atmos Energy Corp. (ATO): 2.1%

125. Connecticut Water Service Inc. (CTWS): 1.8%

126. Northwest Natural Holding Co. (NWN): 3%

127. Entergy Corp. (ETR): 3.8%

128. Middlesex Water Co. (MSEX): 1.8%

129. Cincinnati Financial Corp. (CINF): 2.6%

130. Lancaster Colony Corp. (LANC): 1.7%

131. American States Water Co. (AWR): 1.6%

C-Rated Retirement Suitability Stocks 1. Senior Housing Properties Trust (SNH): 17.8%

2. DowDuPont Inc. (DWDP): 4%

3. Genesis Energy LP (GEL): 9.6%

4. Vector Grp. Ltd (VGR): 15.4%

5. HSBC Holdings plc (HSBC): 9.9%

6. EQM Midstream Partners LP (EQM): 9.9%

7. China Petroleum & Chemical Corp. (SNP): 10.8%

8. Aegon NV (AEG): 6.7%

9. Apollo Global Mgmt. LLC (APO): 8%

10. Six Flags Entertainment Corp. (SIX): 6.5%

11. Buckeye Partners LP (BPL): 8.9%

12. Manulife Financial Corp. (MFC): 4.2%

30

13. Principal Financial Grp. Inc. (PFG): 4.2%

14. Compass Diversified Holdings (CODI): 8.9%

15. Comerica Inc. (CMA): 3.5%

16. Ladder Capital Corp. (LADR): 8%

17. KeyCorp (KEY): 4.2%

18. Macquarie Infra. Corp. (MIC): 9.6%

19. New Residential Inv. Corp. (NRZ): 12%

20. M&T Bank Corp. (MTB): 2.5%

21. MPLX LP (MPLX): 7.9%

22. The Goldman Sachs Grp. Inc. (GS): 1.6%

23. Southwest Airlines Co. (LUV): 1.2%

24. Spark Energy Inc. (SPKE): 7.8%

25. WPP plc (WPP): 7%

26. Artisan Partners Asset Mgmt. Inc. (APAM): 8.4%

27. Macy's Inc. (M): 6%

28. Waddell & Reed Financial Inc. (WDR): 5.7%

29. Banco Santander SA (SAN): 6.1%

30. Snap-on Inc. (SNA): 2.4%

31. Old Republic Intl. Corp. (ORI): 3.9%

32. Brookfield Infra. Partners LP (BIP): 4.9%

33. The Boeing Co. (BA): 2.2%

34. Huntington Bancshares Inc. (HBAN): 4.3%

35. Northrop Grumman Corp. (NOC): 1.8%

36. Macerich Co. (MAC): 6.9%

37. Textron Inc. (TXT): 0.2%

38. LyondellBasell Industries NV (LYB): 4.4%

39. Ford Motor Co. (F): 6.5%

40. Brookfield Renewable Partners LP (BEP): 6.5%

41. Perrigo Co. plc (PRGO): 1.5%

42. CenturyLink Inc. (CTL): 8.1%

43. Seagate Technology plc (STX): 5.2%

44. Molson Coors Brewing Co. (TAP): 2.8%

45. American Express Co. (AXP): 1.4%

46. The Blackstone Grp. LP (BX): 6.7%

47. Texas Instruments Inc. (TXN): 2.7%

48. Canadian Pacific Railway Ltd (CP): 0.9%

49. Donaldson Co. Inc. (DCI): 1.5%

50. Ares Capital Corp. (ARCC): 9.3%

51. Telefónica SA (TEF): 5.5%

52. Eni SpA (E): 5.4%

53. Intel Corp. (INTC): 2.3%

54. ONEOK Inc. (OKE): 4.9%

55. UnitedHealth Grp. Inc. (UNH): 1.5%

56. Nielsen Holdings plc (NLSN): 5.3%

57. BlackRock Inc. (BLK): 3%

58. B&G Foods Inc. (BGS): 7.9%

59. Summit Hotel Properties Inc. (INN): 6.2%

60. Foot Locker Inc. (FL): 2.5%

61. FedEx Corp. (FDX): 1.4%

62. Sempra Energy (SRE): 3%

63. L Brands Inc. (LB): 4.4%

64. Kinder Morgan Inc. (KMI): 4%

65. A. O. Smith Corp. (AOS): 1.6%

66. Lamar Advertising Co. (LAMR): 4.8%

67. Medical Properties Trust Inc. (MPW): 5.4%

68. Navient Corporation (NAVI): 5.4%

69. Legg Mason Inc. (LM): 4.5%

70. General Motors Co. (GM): 3.9%

71. Prudential Financial Inc. (PRU): 4.1%

72. Apollo Comml. Real Estate Finance Inc. (ARI): 10.1%

73. GameStop Corp. (GME): 15.5%

74. Comcast Corp. (CMCSA): 2.1%

75. GlaxoSmithKline plc (GSK): 5.8%

76. Starwood Property Trust Inc. (STWD): 8.5%

77. Store Capital Corp. (STOR): 4%

78. Taubman Centers, Inc. (TCO): 5.1%

79. Becton, Dickinson & Co. (BDX): 1.2%

80. The Sherwin-Williams Co. (SHW): 1%

81. NetApp Inc. (NTAP): 2.2%

82. Calvin B. Taylor Bankshares Inc. (TYCB): 2.6%

83. Digital Realty Trust Inc. (DLR): 3.6%

84. The Home Depot Inc. (HD): 2.7%

85. Dominion Energy Inc. (D): 4.5%

86. OUTFRONT Media Inc. (OUT): 6%

87. Kimco Realty Corp. (KIM): 6.2%

88. CenterPoint Energy Inc. (CNP): 3.8%

89. Seaspan Corp. (SSW): 5.4%

90. Deere & Co. (DE): 1.9%

91. Honda Motor Co. Ltd (HMC): 3.5%

92. Annaly Capital Mgmt. Inc. (NLY): 12%

93. Raytheon Co. (RTN): 2.1%

94. Valero Energy Corp. (VLO): 4.2%

95. Flowers Foods Inc. (FLO): 3.4%

96. Oracle Corp. (ORCL): 1.8%

97. Orchid Island Capital Inc. (ORC): 14.4%

98. TC PipeLines LP (TCP): 7.2%

99. American Electric Power Co. Inc. (AEP): 3.2%

100. CSX Corp. (CSX): 1.3%

101. Duke Energy Corp. (DUK): 4.1%

102. The Hershey Co. (HSY): 2.5%

103. Ingersoll-Rand plc (IR): 1.9%

104. First Financial Corp. (THFF): 2.5%

105. CF Industries Holdings Inc. (CF): 2.8%

106. Ross Stores Inc. (ROST): 1.1%

107. Public Storage (PSA): 3.7%

108. Chubb Ltd (CB): 2.1%

109. Cracker Barrel Old Country Store Inc. (CBRL): 3.3%

110. Unilever plc (UL): 3.1%

111. National Fuel Gas Co. (NFG): 2.8%

112. Campbell Soup Co. (CPB): 3.6%

113. Corning Inc. (GLW): 2.3%

114. Chesapeake Financial Shares Inc. (CPKF): 2.2%

115. Brookfield Asset Mgmt. Inc. (BAM): 1.4%

116. DTE Energy Co. (DTE): 3.1%

117. Taiwan Semiconductor Mfg. Co. Ltd (TSM): 3.2%

118. The J. M. Smucker Co. (SJM): 2.9%

119. Brady Corp. (BRC): 1.8%

120. Gladstone Inv. Corp. (GAIN): 6.7%

121. The TJX Companies Inc. (TJX): 1.7%

122. International Flavors & Fragrances Inc. (IFF): 2.2%

123. Suncor Energy Inc. (SU.TO): 3.8%

124. Cisco Systems Inc. (CSCO): 2.5%

125. Dillard's Inc. (DDS): 0.5%

126. Rogers Communications Inc. (RCI.B.TO): 2.8%

127. Realty Income Corp. (O): 3.8%

128. Assurant Inc. (AIZ): 2.5%

129. Nordson Corp. (NDSN): 1%

130. Welltower Inc. (WELL): 4.6%

31

131. HCP Inc. (HCP): 4.8%

132. McGrath RentCorp (MGRC): 2.6%

133. Merck & Co. Inc. (MRK): 2.7%

134. Church & Dwight Co. Inc. (CHD): 1.3%

135. United Technologies Corp. (UTX): 2.2%

136. Brown-Forman Corp. (BF.B): 1.3%

137. MSA Safety Inc. (MSA): 1.5%

138. L3 Technologies Inc. (LLL): 1.6%

139. Stepan Co. (SCL): 1.1%

140. McCormick & Co. Inc. (MKC): 1.5%

141. NextEra Energy Inc. (NEE): 2.6%

142. Aqua America Inc. (WTR): 2.4%

143. Ecolab Inc. (ECL): 1%

144. Hasbro Inc. (HAS): 3.2%

145. Roper Technologies Inc. (ROP): 0.5%

146. Union Pacific Corp. (UNP): 2.1%

147. Nestlé SA (NSRGY): 2.6%

148. Universal Health Realty Income Trust (UHT): 3.4%

149. Advance Auto Parts Inc. (AAP): 0.1%

150. Cintas Corp. (CTAS): 1%

151. Automatic Data Processing Inc. (ADP): 2%

152. Tootsie Roll Industries Inc. (TR): 1%

153. Stage Stores Inc. (SSI): 18.9%

154. MGE Energy Inc. (MGEE): 2%

155. California Water Service Grp. (CWT): 1.6%

156. West Pharmaceutical Srvcs. Inc. (WST): 0.5%

157. RLI Corp. (RLI): 1.2%

D-Rated Retirement Suitability Stocks 1. Lazard Ltd (LAZ): 4.8%

2. POSCO (PKX): 3%

3. BB&T Corp. (BBT): 3.4%

4. Bayer AG (BAYRY): 4.8%

5. Consolidated Water Co. Ltd (CWCO): 2.7%

6. Mckesson Corp. (MCK): 1.4%

7. Synchrony Financial (SYF): 2.6%

8. Hawaiian Holdings Inc. (HA): 1.6%

9. Bank of America Corp. (BAC): 2.1%

10. Fiat Chrysler Automobiles NV (FCAU): 4.8%

11. Citigroup Inc. (C): 2.8%

12. Applied Materials Inc. (AMAT): 2%

13. Magna Intl. Inc. (MGA): 2.8%

14. Johnson Controls Intl. plc (JCI): 2.9%

15. Schlumberger Ltd/NV (SLB): 4.4%

16. Royal Caribbean Cruises Ltd (RCL): 2.4%

17. Alaska Air Grp. Inc. (ALK): 2.4%

18. Sun Life Financial Inc. (SLF): 3.8%

19. Discover Financial Services (DFS): 2.2%

20. Harley-Davidson Inc. (HOG): 3.9%

21. Broadcom Inc. (AVGO): 3.5%

22. Dine Brands Global Inc. (DIN): 3%

23. Wells Fargo & Co. (WFC): 3.7%

24. Halliburton Co. (HAL): 2.3%

25. Ryder System Inc. (R): 3.4%

26. Abercrombie & Fitch Co. (ANF): 3.2%

27. Tenaris SA (TS): 2.9%

28. Arthur J. Gallagher & Co. (AJG): 2.2%

29. Toyota Motor Corp. (TM): 2.9%

30. Canadian Natural Resources Ltd (CNQ.TO): 3.5%

31. Bristol-Myers Squibb Co. (BMY): 3.6%

32. Kansas City Southern (KSU): 1.2%

33. TransCanada Corp. (TRP): 4.9%

34. Ping An Insurance Grp. Co. of China Ltd (PNGAY): 2.8%

35. NACCO Industries Inc. (NC): 1.6%

36. The Bank of New York Mellon Corp. (BK): 2.2%

37. SAP SE (SAP): 1.6%

38. China Mobile Ltd (CHL): 4.2%

39. Fresenius Medical Care AG & Co. KGaA (FMS): 1.5%

40. Crown Castle Intl. Corp. (CCI): 3.5%

41. Williams-Sonoma Inc. (WSM): 3.3%

42. STAG Industrial Inc. (STAG): 4.9%

43. Domino's Pizza Inc. (DPZ): 1.1%

44. Baker Hughes, a GE Co. (BHGE): 2.7%

45. The Walt Disney Co. (DIS): 1.5%

46. Ally Financial Inc. (ALLY): 2.4%

47. Deutsche Telekom AG (DTEGY): 4.6%

48. Marathon Petroleum Corp. (MPC): 3.4%

49. Xerox Corp. (XRX): 3%

50. Constellation Brands Inc. (STZ): 1.6%

51. KLA-Tencor Corp. (KLAC): 2.5%

52. Ambev SA (ABEV): 5.3%

53. JPMorgan Chase & Co. (JPM): 3.1%

54. Stryker Corp. (SYK): 1.1%

55. Autoliv Inc. (ALV): 3.2%

56. Tractor Supply Co. (TSCO): 1.2%

57. The Toro Co. (TTC): 1.3%

58. Aon plc (AON): 1%

59. Cognizant Technology Solutions Corp. (CTSH): 1.1%

60. Mastercard Inc. (MA): 0.6%

61. Dollar General Corp. (DG): 1%

62. Weyerhaeuser Co. (WY): 5.1%

63. Visa Inc. (V): 0.6%

64. Jack in the Box Inc. (JACK): 2%

65. Best Buy Co. Inc. (BBY): 2.7%

66. SEI Investments Co. (SEIC): 1.2%

67. Popular Inc. (BPOP): 2.3%

68. S&P Global Inc. (SPGI): 1.1%

69. Keurig Dr Pepper Inc. (KDP): 2.2%

70. CNOOC Ltd (CEO): 3.8%

71. Shaw Communications Inc. (SJR.A): 4.1%

72. PetroChina Co. Ltd (PTR): 2%

73. Anheuser-Busch InBev NV (BUD): 3.8%

74. NVIDIA Corp. (NVDA): 0.3%

75. PACCAR Inc. (PCAR): 1.9%

76. Apple Inc. (AAPL): 1.5%

77. Microsoft Corp. (MSFT): 1.5%

78. The Allstate Corp. (ALL): 2.1%

79. Starbucks Corp. (SBUX): 1.9%

80. ResMed Inc. (RMD): 1.5%

81. Copa Holdings SA (CPA): 3.2%

82. Tiffany & Co. (TIF): 2.1%

83. Las Vegas Sands Corp. (LVS): 4.7%

84. Restaurant Brands Intl. Inc. (QSR): 3.1%

85. Boston Properties Inc. (BXP): 2.8%

86. Canon Inc. (CAJ): 5.2%

87. Nokia Corp. (NOK): 4%

88. Fastenal Co. (FAST): 2.7%

32

89. Telephone & Data Systems Inc. (TDS): 2.1%

90. Pfizer Inc. (PFE): 3.4%

91. Mondelez Intl. Inc. (MDLZ): 2.1%

92. Helmerich & Payne Inc. (HP): 4.9%

93. Rockwell Automation Inc. (ROK): 2.1%

94. Yum! Brands Inc. (YUM): 1.7%

95. Xylem Inc. (XYL): 1.2%

96. Morningstar Inc. (MORN): 0.9%

97. Dunkin' Brands Grp. Inc. (DNKN): 2%

98. América Móvil SAB de CV (AMX): 2%

99. Franklin Electric Co. Inc. (FELE): 1.2%

100. Rio Tinto plc (RIO): 5.8%

101. Otter Tail Corp. (OTTR): 2.8%

102. Methanex Corp. (MEOH): 2.3%

103. Costco Wholesale Corp. (COST): 0.9%

104. Norfolk Southern Corp. (NSC): 1.8%

105. Honeywell Intl. Inc. (HON): 2%

106. Delta Air Lines Inc. (DAL): 2.5%

107. Williams Companies (WMB): 5.3%

108. Diageo plc (DEO): 1.7%

109. Nike Inc. (NKE): 1%

110. Canadian National Railway Co. (CNI): 1.8%

111. Waste Mgmt. Inc. (WM): 2%

112. Moody's Corp. (MCO): 1.1%

113. Equity Residential (EQR): 3%

114. BHP Group Ltd (BHP): 4.2%

115. AvalonBay Communities Inc. (AVB): 3%

116. Jack Henry & Associates Inc. (JKHY): 1.1%

117. Garmin Ltd (GRMN): 2.6%

118. Thomson Reuters Corp. (TRI): 2.5%

119. Meredith Corp. (MDP): 4.1%

120. Mercury General Corp. (MCY): 5.1%

121. Westamerica Bancorporation (WABC): 2.6%

122. R.R. Donnelley & Sons Co. (RRD): 2.7%

123. Linde plc (LIN): 1.9%

124. Paychex Inc. (PAYX): 2.8%

125. Erie Indemnity Co. (ERIE): 2.1%

126. CAE Inc. (CAE.TO): 1.3%

127. Eli Lilly & Co. (LLY): 2%

128. AstraZeneca plc (AZN): 3.4%

129. Badger Meter Inc. (BMI): 1.1%

F-Rated Retirement Suitability Stocks 1. Owens & Minor Inc. (OMI): 0.3%

2. ArcelorMittal (MT): 0.9%

3. Apache Corp. (APA): 2.9%

4. American Airlines Grp. Inc. (AAL): 1.2%

5. TechnipFMC plc (FTI): 2.1%

6. National Oilwell Varco Inc. (NOV): 0.7%

7. ConocoPhillips (COP): 1.9%

8. Aptiv plc (APTV): 1%

9. Pearson plc (PSO): 2.3%

10. Logitech Intl. SA (LOGI): 1.7%

11. Yamana Gold Inc. (AUY): 0.8%

12. Sony Corp. (SNE): 0.6%

13. General Electric Co. (GE): 0.4%

14. Novo Nordisk A/S (NVO): 2.5%

15. MGM Resorts Intl. (MGM): 2%

16. Petróleo Brasileiro SA - Petrobras (PBR): 0.6%

17. Patterson-UTI Energy Inc. (PTEN): 1.1%

18. Scholastic Corp. (SCHL): 1.5%

19. Nabors Industries Ltd (NBR): 1%

20. Accenture plc (ACN): 1.6%

21. Koninklijke Philips NV (PHG): 2.5%

22. Melco Resorts & Entertainment Ltd (MLCO): 2.5%

23. The Wendy's Co. (WEN): 2.2%

24. Wynn Resorts Ltd (WYNN): 2.2%

25. Ferrari NV (RACE): 0.6%

26. Newmont Mining Corp. (NEM): 1.5%

27. Barrick Gold Corp. (GOLD): 2%

28. Telefonaktiebolaget LM Ericsson (ERIC): 1.1%

29. Wheaton Precious Metals Corp. (WPM): 1.5%

30. Kulicke & Soffa Industries Inc. (KLIC): 2%

33

List of Stocks by Sector

Each of the securities in The Sure Analysis Research Database are grouped according to sector and

Retirement Suitability Score and sorted (from highest to lowest) by Expected Total Returns.

Dividend or distribution yield is included next to each security’s ticker symbol. The Retirement

Suitability Score is a combination of the Dividend Risk Score and the security’s Distribution

or Dividend Yield. You can learn more about how the score is calculated at The Sure Analysis

Glossary.

Note: Check The Sure Analysis Research Database for the most up-to-date Retirement Suitability

Scores and Dividend Yields.

Basic Materials A-Ranked Retirement Suitability 1. N/A

B-Ranked Retirement Suitability 1. Domtar Corp. (UFS): 3.6%

2. PPG Industries Inc. (PPG): 1.7%

3. MDU Resources Grp. Inc. (MDU): 3.2%

4. H.B. Fuller Co. (FUL): 1.3%

5. RPM Intl. Inc. (RPM): 2.3%

6. Air Products & Chemicals Inc. (APD): 2.4%

7. Nucor Corp. (NUE): 2.7%

C-Ranked Retirement Suitability 1. DowDuPont Inc. (DWDP): 4%

2. LyondellBasell Industries NV (LYB): 4.4%

3. The Sherwin-Williams Co. (SHW): 1%

4. CF Industries Holdings Inc. (CF): 2.8%

5. International Flavors & Fragrances Inc. (IFF): 2.2%

6. Stepan Co. (SCL): 1.1%

7. Ecolab Inc. (ECL): 1%

D-Ranked Retirement Suitability 1. POSCO (PKX): 3%

2. NACCO Industries Inc. (NC): 1.6%

3. Weyerhaeuser Co. (WY): 5.1%

4. Rio Tinto plc (RIO): 5.8%

5. Methanex Corp. (MEOH): 2.3%

6. BHP Group Ltd (BHP): 4.2%

7. Linde plc (LIN): 1.9%

F-Ranked Retirement Suitability 1. ArcelorMittal (MT): 0.9%

2. Yamana Gold Inc. (AUY): 0.8%

3. Newmont Mining Corp. (NEM): 1.5%

4. Barrick Gold Corp. (GOLD): 2%

5. Wheaton Precious Metals Corp. (WPM): 1.5%

Communication Services A-Ranked Retirement Suitability 1. AT&T Inc. (T) - 6.4%

B-Ranked Retirement Suitability 1. Vodafone Grp. Plc (VOD): 9.5%

2. BT Grp. plc (BT): 6.5%

3. Verizon Communications Inc. (VZ): 4.1%

4. BCE Inc. (BCE): 5.3%

5. TELUS Corp. (T.TO): 4.4%

C-Ranked Retirement Suitability 1. CenturyLink Inc. (CTL): 8.1%

2. Telefónica SA (TEF): 5.5%

3. Comcast Corp. (CMCSA): 2.1%

4. Rogers Communications Inc. (RCI.B.TO): 2.8%

D-Ranked Retirement Suitability 1. China Mobile Ltd (CHL): 4.2%

2. Deutsche Telekom AG (DTEGY): 4.6%

3. Shaw Communications Inc. (SJR.A): 4.1%

4. Telephone & Data Systems Inc. (TDS): 2.1%

5. América Móvil SAB de CV (AMX): 2%

F-Ranked Retirement Suitability 1. N/A

Consumer Cyclical A-Ranked Retirement Suitability 1. WestRock Co. (WRK): 4.7%

2. Leggett & Platt Inc. (LEG): 3.6%

3. International Paper Co. (IP): 4.2%

4. Genuine Parts Co. (GPC): 2.7%

5. WEYCO Grp. Inc. (WEYS): 2.8%

https://www.suredividend.com/sure-analysis-research-database/



34

B-Ranked Retirement Suitability 1. Carnival Corp. (CCL): 3.9%

2. Nordstrom Inc. (JWN): 3.4%

3. Whirlpool Corp. (WHR): 3.4%

4. John Wiley & Sons Inc. (JW.A): 3%

5. Omnicom Grp. Inc. (OMC): 3.5%

6. Polaris Industries Inc. (PII): 2.6%

7. H&R Block Inc. (HRB): 4%

8. Hanesbrands Inc. (HBI): 3.3%

9. Kohl's Corp. (KSS): 3.7%

10. Lowe's Companies Inc. (LOW): 1.7%

11. McDonald's Corp. (MCD): 2.4%

12. Sonoco Products Co. (SON): 2.7%

13. V. F. Corp. (VFC): 2.3%

14. Bed Bath & Beyond Inc. (BBBY): 3.5%

15. Bemis Co. Inc. (BMS): 2.3%

C-Ranked Retirement Suitability 1. Six Flags Entertainment Corp. (SIX): 6.5%

2. WPP plc (WPP): 7%

3. Macy's Inc. (M): 6%

4. Ford Motor Co. (F): 6.5%

5. Foot Locker Inc. (FL): 2.5%

6. L Brands Inc. (LB): 4.4%

7. General Motors Co. (GM): 3.9%

8. GameStop Corp. (GME): 15.5%

9. The Home Depot Inc. (HD): 2.7%

10. Honda Motor Co. Ltd (HMC): 3.5%

11. Ross Stores Inc. (ROST): 1.1%

12. Cracker Barrel Old Country Store Inc. (CBRL): 3.3%

13. The TJX Companies Inc. (TJX): 1.7%

14. Dillard's Inc. (DDS): 0.5%

15. Hasbro Inc. (HAS): 3.2%

16. Advance Auto Parts Inc. (AAP): 0.1%

17. Stage Stores Inc. (SSI): 18.9%

D-Ranked Retirement Suitability 1. Fiat Chrysler Automobiles NV (FCAU): 4.8%

2. Magna Intl. Inc. (MGA): 2.8%

3. Royal Caribbean Cruises Ltd (RCL): 2.4%

4. Harley-Davidson Inc. (HOG): 3.9%

5. Dine Brands Global Inc. (DIN): 3%

6. Abercrombie & Fitch Co. (ANF): 3.2%

7. Toyota Motor Corp. (TM): 2.9%

8. Williams-Sonoma Inc. (WSM): 3.3%

9. Domino's Pizza Inc. (DPZ): 1.1%

10. The Walt Disney Co. (DIS): 1.5%

11. Autoliv Inc. (ALV): 3.2%

12. Tractor Supply Co. (TSCO): 1.2%

13. Jack in the Box Inc. (JACK): 2%

14. Best Buy Co. Inc. (BBY): 2.7%

15. Starbucks Corp. (SBUX): 1.9%

16. Tiffany & Co. (TIF): 2.1%

17. Las Vegas Sands Corp. (LVS): 4.7%

18. Restaurant Brands Intl. Inc. (QSR): 3.1%

19. Yum! Brands Inc. (YUM): 1.7%

20. Dunkin' Brands Grp. Inc. (DNKN): 2%

21. Nike Inc. (NKE): 1%

22. Meredith Corp. (MDP): 4.1%

F-Ranked Retirement Suitability 1. Aptiv plc (APTV): 1%

2. Pearson plc (PSO): 2.3%

3. MGM Resorts Intl. (MGM): 2%

4. Scholastic Corp. (SCHL): 1.5%

5. Melco Resorts & Entertainment Ltd (MLCO): 2.5%

6. The Wendy's Co. (WEN): 2.2%

7. Wynn Resorts Ltd (WYNN): 2.2%

8. Ferrari NV (RACE): 0.6%

Consumer Defensive A-Ranked Retirement Suitability 1. Walgreens Boots Alliance Inc. (WBA): 3.2%

2. Altria Grp. Inc. (MO): 5.8%

3. The Kraft Heinz Co. (KHC): 4.9%

4. Archer-Daniels-Midland Co. (ADM): 3.3%

5. Target Corp. (TGT): 3.2%

6. Universal Corp. (UVV): 5.4%

7. Kimberly-Clark Corp. (KMB): 3.4%

8. The Coca-Cola Co. (KO): 3.4%

9. The Procter & Gamble Co. (PG): 2.7%

B-Ranked Retirement Suitability 1. Newell Brands Inc. (NWL): 6%

2. Imperial Brands plc (IMBBY): 7.3%

3. British American Tobacco plc (BTI): 6.7%

4. Kellogg Co. (K): 3.9%

5. The Kroger Co. (KR): 2.3%

6. Philip Morris Intl. Inc. (PM): 5.3%

7. Sysco Corp. (SYY): 2.3%

8. General Mills Inc. (GIS): 3.8%

9. Conagra Brands Inc. (CAG): 3.1%

10. PepsiCo Inc. (PEP): 3%

11. The Clorox Co. (CLX): 2.5%

12. Walmart Inc. (WMT): 2.2%

13. Hormel Foods Corp. (HRL): 2%

14. Colgate-Palmolive Co. (CL): 2.5%

15. Lancaster Colony Corp. (LANC): 1.7%

C-Ranked Retirement Suitability 1. Vector Grp. Ltd (VGR): 15.4%

2. Molson Coors Brewing Co. (TAP): 2.8%

3. B&G Foods Inc. (BGS): 7.9%

4. Flowers Foods Inc. (FLO): 3.4%

5. The Hershey Co. (HSY): 2.5%

6. Unilever plc (UL): 3.1%

7. Campbell Soup Co. (CPB): 3.6%

8. The J. M. Smucker Co. (SJM): 2.9%

9. Church & Dwight Co. Inc. (CHD): 1.3%

10. Brown-Forman Corp. (BF.B): 1.3%

11. McCormick & Co. Inc. (MKC): 1.5%

12. Nestlé SA (NSRGY): 2.6%

13. Tootsie Roll Industries Inc. (TR): 1%

35

D-Ranked Retirement Suitability 1. Constellation Brands Inc. (STZ): 1.6%

2. Ambev SA (ABEV): 5.3%

3. Dollar General Corp. (DG): 1%

4. Keurig Dr Pepper Inc. (KDP): 2.2%

5. Anheuser-Busch InBev NV (BUD): 3.8%

6. Mondelez Intl. Inc. (MDLZ): 2.1%

7. Costco Wholesale Corp. (COST): 0.9%

8. Diageo plc (DEO): 1.7%


Energy A-Ranked Retirement Suitability 1. Energy Transfer LP (ET): 7.9%

2. Enbridge Inc. (ENB): 6.1%

3. Chevron Corp. (CVX): 3.8%

4. Enterprise Products Partners LP (EPD): 6%

5. Exxon Mobil Corp. (XOM): 4%

6. Pembina Pipeline Corp. (PPL.TO): 4.6%

B-Ranked Retirement Suitability 1. Sunoco LP (SUN): 10.8%

2. Holly Energy Partners LP (HEP): 9.9%

3. Targa Resources Corp. (TRGP): 9.1%

4. Magellan Midstream Partners LP (MMP): 6.4%

5. Total SA (TOT): 5.1%

6. Royal Dutch Shell plc (RDS.B): 5.7%

7. Imperial Oil Ltd (IMO): 2%

8. HollyFrontier Corp. (HFC): 2.7%

9. BP plc (BP): 5.5%

10. Occidental Petroleum Corp. (OXY): 4.6%

11. Phillips 66 (PSX): 3.3%

12. Vermilion Energy Inc. (VET): 8.1%

C-Ranked Retirement Suitability 1. Genesis Energy LP (GEL): 9.6%

2. EQM Midstream Partners LP (EQM): 9.9%

3. China Petroleum & Chemical Corp. (SNP): 10.8%

4. Buckeye Partners LP (BPL): 8.9%

5. MPLX LP (MPLX): 7.9%

6. Eni SpA (E): 5.4%

7. ONEOK Inc. (OKE): 4.9%

8. Kinder Morgan Inc. (KMI): 4%

9. Valero Energy Corp. (VLO): 4.2%

10. TC PipeLines LP (TCP): 7.2%

11. National Fuel Gas Co. (NFG): 2.8%

12. Suncor Energy Inc. (SU.TO): 3.8%

D-Ranked Retirement Suitability 1. Schlumberger Ltd/NV (SLB): 4.4%

2. Halliburton Co. (HAL): 2.3%

3. Tenaris SA (TS): 2.9%

4. Canadian Natural Resources Ltd (CNQ.TO): 3.5%

5. TransCanada Corp. (TRP): 4.9%

6. Baker Hughes, a GE Co. (BHGE): 2.7%

7. Marathon Petroleum Corp. (MPC): 3.4%

8. CNOOC Ltd (CEO): 3.8%

9. PetroChina Co. Ltd (PTR): 2%

10. Helmerich & Payne Inc. (HP): 4.9%

11. Williams Companies (WMB): 5.3%

F-Ranked Retirement Suitability 1. Apache Corp. (APA): 2.9%

2. TechnipFMC plc (FTI): 2.1%

3. National Oilwell Varco Inc. (NOV): 0.7%

4. ConocoPhillips (COP): 1.9%

5. Petróleo Brasileiro SA - Petrobras (PBR): 0.6%

6. Patterson-UTI Energy Inc. (PTEN): 1.1%

7. Nabors Industries Ltd (NBR): 1%

Financial Services A-Ranked Retirement Suitability 1. Bank OZK (OZK): 2.9%

2. The Bank of Nova Scotia (BNS.TO): 4.9%

3. Invesco Ltd (IVZ): 5.9%

4. Eaton Vance Corp. (EV): 3.4%

5. Canadian Imperial Bank of Commerce (CM): 5.1%

6. People's United Financial Inc. (PBCT): 4.2%

7. National Bank of Canada (NA.TO): 4.2%

8. T. Rowe Price Grp. Inc. (TROW): 2.9%

9. Community Trust Bancorp Inc. (CTBI): 3.5%

10. Tompkins Financial Corp. (TMP): 2.6%

11. MetLife Inc. (MET): 3.8%

12. United Bankshares Inc. (UBSI): 3.6%

13. Franklin Resources Inc. (BEN): 3%

B-Ranked Retirement Suitability 1. Ameriprise Financial Inc. (AMP): 2.6%

2. Royal Bank of Canada (RY.TO): 4%

3. U.S. Bancorp (USB): 3%

4. 1st Source Corp. (SRCE): 2.4%

5. Farmers & Merchants Bancorp (FMCB): 1.8%

6. Main Street Capital Corp. (MAIN): 6.3%

7. The Toronto-Dominion Bank (TD.TO): 4%

8. Eagle Financial Srvcs. Inc. (EFSI): 3.1%

9. Commerce Bancshares Inc. (CBSH): 1.8%

10. Bank of Montreal (BMO.TO): 3.9%

11. The Western Union Co. (WU): 4.1%

12. Everest Re Grp. Ltd (RE): 2.6%

13. UMB Financial Corp. (UMBF): 1.9%

14. Community Bank System Inc. (CBU): 2.5%

15. The Travelers Companies Inc. (TRV): 2.3%

16. Aflac Inc. (AFL): 2.2%

17. AXIS Capital Holdings Ltd (AXS): 2.9%

18. Great-West Lifeco Inc. (GWO.TO): 5%

19. Cincinnati Financial Corp. (CINF): 2.6%

C-Ranked Retirement Suitability 1. HSBC Holdings plc (HSBC): 9.9%

2. Aegon NV (AEG): 6.7%

36

3. Apollo Global Mgmt. LLC (APO): 8%

4. Manulife Financial Corp. (MFC): 4.2%

5. Principal Financial Grp. Inc. (PFG): 4.2%

6. Comerica Inc. (CMA): 3.5%

7. KeyCorp (KEY): 4.2%

8. M&T Bank Corp. (MTB): 2.5%

9. The Goldman Sachs Grp. Inc. (GS): 1.6%

10. Artisan Partners Asset Mgmt. Inc. (APAM): 8.4%

11. Waddell & Reed Financial Inc. (WDR): 5.7%

12. Banco Santander SA (SAN): 6.1%

13. Old Republic Intl. Corp. (ORI): 3.9%

14. Huntington Bancshares Inc. (HBAN): 4.3%

15. American Express Co. (AXP): 1.4%

16. The Blackstone Grp. LP (BX): 6.7%

17. Ares Capital Corp. (ARCC): 9.3%

18. BlackRock Inc. (BLK): 3%

19. Navient Corporation (NAVI): 5.4%

20. Legg Mason Inc. (LM): 4.5%

21. Prudential Financial Inc. (PRU): 4.1%

22. Calvin B. Taylor Bankshares Inc. (TYCB): 2.6%

23. First Financial Corp. (THFF): 2.5%

24. Chubb Ltd (CB): 2.1%

25. Chesapeake Financial Shares Inc. (CPKF): 2.2%

26. Brookfield Asset Mgmt. Inc. (BAM): 1.4%

27. Gladstone Inv. Corp. (GAIN): 6.7%

28. Assurant Inc. (AIZ): 2.5%

29. RLI Corp. (RLI): 1.2%

D-Ranked Retirement Suitability 1. Lazard Ltd (LAZ): 4.8%

2. BB&T Corp. (BBT): 3.4%

3. Synchrony Financial (SYF): 2.6%

4. Bank of America Corp. (BAC): 2.1%

5. Citigroup Inc. (C): 2.8%

6. Sun Life Financial Inc. (SLF): 3.8%

7. Discover Financial Services (DFS): 2.2%

8. Wells Fargo & Co. (WFC): 3.7%

9. Arthur J. Gallagher & Co. (AJG): 2.2%

10. Ping An Insurance Grp. Co. of China Ltd (PNGAY): 2.8%

11. The Bank of New York Mellon Corp. (BK): 2.2%

12. Ally Financial Inc. (ALLY): 2.4%

13. JPMorgan Chase & Co. (JPM): 3.1%

14. Aon plc (AON): 1%

15. Mastercard Inc. (MA): 0.6%

16. Visa Inc. (V): 0.6%

17. SEI Investments Co. (SEIC): 1.2%

18. Popular Inc. (BPOP): 2.3%

19. S&P Global Inc. (SPGI): 1.1%

20. The Allstate Corp. (ALL): 2.1%

21. Moody's Corp. (MCO): 1.1%

22. Thomson Reuters Corp. (TRI): 2.5%

23. Mercury General Corp. (MCY): 5.1%

24. Westamerica Bancorporation (WABC): 2.6%

25. Erie Indemnity Co. (ERIE): 2.1%


Healthcare A-Ranked Retirement Suitability 1. AbbVie Inc. (ABBV): 5.2%

2. Cardinal Health Inc. (CAH): 4%

3. CVS Health Corp. (CVS): 3.7%

4. Johnson & Johnson (JNJ): 2.7%

B-Ranked Retirement Suitability 1. AmerisourceBergen Corp. (ABC): 2.1%

2. Sanofi (SNY): 4.2%

3. Gilead Sciences Inc. (GILD): 3.8%

4. Novartis AG (NVS): 3.4%

5. Amgen Inc. (AMGN): 3%

6. Patterson Companies Inc. (PDCO): 4.7%

7. Medtronic plc (MDT): 2.3%

8. Abbott Laboratories (ABT): 1.6%

C-Ranked Retirement Suitability 1. Perrigo Co. plc (PRGO): 1.5%

2. UnitedHealth Grp. Inc. (UNH): 1.5%

3. GlaxoSmithKline plc (GSK): 5.8%

4. Becton, Dickinson & Co. (BDX): 1.2%

5. Merck & Co. Inc. (MRK): 2.7%

6. West Pharmaceutical Srvcs. Inc. (WST): 0.5%

D-Ranked Retirement Suitability 1. Bayer AG (BAYRY): 4.8%

2. Mckesson Corp. (MCK): 1.4%

3. Bristol-Myers Squibb Co. (BMY): 3.6%

4. Fresenius Medical Care AG & Co. KGaA (FMS): 1.5%

5. Stryker Corp. (SYK): 1.1%

6. ResMed Inc. (RMD): 1.5%

7. Pfizer Inc. (PFE): 3.4%

8. Eli Lilly & Co. (LLY): 2%

9. AstraZeneca plc (AZN): 3.4%

F-Ranked Retirement Suitability 1. Owens & Minor Inc. (OMI): 0.3%

2. Novo Nordisk A/S (NVO): 2.5%

3. Koninklijke Philips NV (PHG): 2.5%

Industrials A-Ranked Retirement Suitability 1. Illinois Tool Works Inc. (ITW): 2.7%

2. Emerson Electric Co. (EMR): 2.8%

3. 3M Co. (MMM): 2.7%

B-Ranked Retirement Suitability 1. HNI Corp. (HNI): 3.2%

2. Caterpillar Inc. (CAT): 2.5%

3. United Parcel Service Inc. (UPS): 3.4%

4. ABB Ltd (ABB): 4.1%

5. MSC Industrial Direct Co. Inc. (MSM): 3%

6. Siemens AG (SIEGY): 3.8%

37

7. Pentair plc (PNR): 1.8%

8. Cummins Inc. (CMI): 2.8%

9. W.W. Grainger Inc. (GWW): 1.8%

10. Carlisle Companies Inc. (CSL): 1.3%

11. General Dynamics Corp. (GD): 2.4%

12. Parker-Hannifin Corp. (PH): 1.7%

13. Lockheed Martin Corp. (LMT): 2.9%

14. Iron Mountain Inc. (IRM): 6.8%

15. Stanley Black & Decker Inc. (SWK): 1.9%

16. ABM Industries Inc. (ABM): 2%

17. Eaton Corp. plc (ETN): 3.5%

18. Dover Corp. (DOV): 2%

19. The Gorman-Rupp Co. (GRC): 1.6%

20. Tennant Co. (TNC): 1.4%

C-Ranked Retirement Suitability 1. Compass Diversified Holdings (CODI): 8.9%

2. Macquarie Infra. Corp. (MIC): 9.6%

3. Southwest Airlines Co. (LUV): 1.2%

4. Snap-on Inc. (SNA): 2.4%

5. The Boeing Co. (BA): 2.2%

6. Northrop Grumman Corp. (NOC): 1.8%

7. Textron Inc. (TXT): 0.2%

8. Canadian Pacific Railway Ltd (CP): 0.9%

9. Donaldson Co. Inc. (DCI): 1.5%

10. Nielsen Holdings plc (NLSN): 5.3%

11. FedEx Corp. (FDX): 1.4%

12. A. O. Smith Corp. (AOS): 1.6%

13. Seaspan Corp. (SSW): 5.4%

14. Deere & Co. (DE): 1.9%

15. Raytheon Co. (RTN): 2.1%

16. CSX Corp. (CSX): 1.3%

17. Ingersoll-Rand plc (IR): 1.9%

18. Brady Corp. (BRC): 1.8%

19. Nordson Corp. (NDSN): 1%

20. McGrath RentCorp (MGRC): 2.6%

21. United Technologies Corp. (UTX): 2.2%

22. MSA Safety Inc. (MSA): 1.5%

23. L3 Technologies Inc. (LLL): 1.6%

24. Roper Technologies Inc. (ROP): 0.5%

25. Union Pacific Corp. (UNP): 2.1%

26. Cintas Corp. (CTAS): 1%

27. Automatic Data Processing Inc. (ADP): 2%

D-Ranked Retirement Suitability 1. Hawaiian Holdings Inc. (HA): 1.6%

2. Johnson Controls Intl. plc (JCI): 2.9%

3. Alaska Air Grp. Inc. (ALK): 2.4%

4. Ryder System Inc. (R): 3.4%

5. Kansas City Southern (KSU): 1.2%

6. The Toro Co. (TTC): 1.3%

7. PACCAR Inc. (PCAR): 1.9%

8. Copa Holdings SA (CPA): 3.2%

9. Canon Inc. (CAJ): 5.2%

10. Fastenal Co. (FAST): 2.7%

11. Rockwell Automation Inc. (ROK): 2.1%

12. Xylem Inc. (XYL): 1.2%

13. Morningstar Inc. (MORN): 0.9%

14. Franklin Electric Co. Inc. (FELE): 1.2%

15. Norfolk Southern Corp. (NSC): 1.8%

16. Honeywell Intl. Inc. (HON): 2%

17. Delta Air Lines Inc. (DAL): 2.5%

18. Canadian National Railway Co. (CNI): 1.8%

19. Waste Mgmt. Inc. (WM): 2%

20. Jack Henry & Associates Inc. (JKHY): 1.1%

21. R.R. Donnelley & Sons Co. (RRD): 2.7%

22. Paychex Inc. (PAYX): 2.8%

23. CAE Inc. (CAE.TO): 1.3%

F-Ranked Retirement Suitability 1. American Airlines Grp. Inc. (AAL): 1.2%

2. General Electric Co. (GE): 0.4%

Real Estate A-Ranked Retirement Suitability 1. Tanger Factory Outlet Centers Inc. (SKT): 7.1%

2. Hospitality Properties Trust (HPT): 8.2%

3. Federal Realty Inv. Trust (FRT): 3%

4. LTC Properties Inc. (LTC): 5.1%

B-Ranked Retirement Suitability 1. Brookfield Property REIT Inc. (BPR): 6.4%

2. Brookfield Property Partners LP (BPY): 6.4%

3. Omega Healthcare Investors Inc. (OHI): 7.3%

4. AGNC Investment Corp. (AGNC): 11.9%

5. Global Net Lease Inc. (GNL): 11.3%

6. ARMOUR Residential REIT Inc. (ARR): 11.5%

7. Apple Hospitality REIT Inc. (APLE): 7.3%

8. Simon Property Grp. Inc. (SPG): 4.5%

9. Urstadt Biddle Properties Inc. (UBA): 5.4%

10. Host Hotels & Resorts Inc. (HST): 4.2%

11. Ventas Inc. (VTR): 5.1%

12. W. P. Carey Inc. (WPC): 5.3%

13. National Retail Properties Inc. (NNN): 3.8%

C-Ranked Retirement Suitability 1. Senior Housing Properties Trust (SNH): 17.8%

2. Ladder Capital Corp. (LADR): 8%

3. New Residential Inv. Corp. (NRZ): 12%

4. Macerich Co. (MAC): 6.9%

5. Summit Hotel Properties Inc. (INN): 6.2%

6. Lamar Advertising Co. (LAMR): 4.8%

7. Medical Properties Trust Inc. (MPW): 5.4%

8. Apollo Comml. Real Estate Finance Inc. (ARI): 10.1%

9. Starwood Property Trust Inc. (STWD): 8.5%

10. Store Capital Corp. (STOR): 4%

11. Taubman Centers, Inc. (TCO): 5.1%

12. Digital Realty Trust Inc. (DLR): 3.6%

13. OUTFRONT Media Inc. (OUT): 6%

14. Kimco Realty Corp. (KIM): 6.2%

15. Annaly Capital Mgmt. Inc. (NLY): 12%

16. Orchid Island Capital Inc. (ORC): 14.4%

17. Public Storage (PSA): 3.7%

18. Realty Income Corp. (O): 3.8%

19. Welltower Inc. (WELL): 4.6%

38

20. HCP Inc. (HCP): 4.8%

21. Universal Health Realty Income Trust (UHT): 3.4%

D-Ranked Retirement Suitability 1. Crown Castle Intl. Corp. (CCI): 3.5%

2. STAG Industrial Inc. (STAG): 4.9%

3. Boston Properties Inc. (BXP): 2.8%

4. Equity Residential (EQR): 3%

5. AvalonBay Communities Inc. (AVB): 3%


Technology A-Ranked Retirement Suitability 1. Western Digital Corp. (WDC): 4%

2. International Business Machines Corp. (IBM): 4.4%

3. Infosys Ltd (INFY): 3%

B-Ranked Retirement Suitability 1. Micro Focus Intl. plc (MFGP): 4.7%

2. HP Inc. (HPQ): 3.3%

3. QUALCOMM Inc. (QCOM): 4.3%

4. Computer Services Inc. (CSVI): 2.3%

C-Ranked Retirement Suitability 1. Seagate Technology plc (STX): 5.2%

2. Texas Instruments Inc. (TXN): 2.7%

3. Intel Corp. (INTC): 2.3%

4. NetApp Inc. (NTAP): 2.2%

5. Oracle Corp. (ORCL): 1.8%

6. Corning Inc. (GLW): 2.3%

7. Taiwan Semiconductor Mfg. Co. Ltd (TSM): 3.2%

8. Cisco Systems Inc. (CSCO): 2.5%

D-Ranked Retirement Suitability 1. Applied Materials Inc. (AMAT): 2%

2. Broadcom Inc. (AVGO): 3.5%

3. SAP SE (SAP): 1.6%

4. Xerox Corp. (XRX): 3%

5. KLA-Tencor Corp. (KLAC): 2.5%

6. Cognizant Technology Solutions Corp. (CTSH): 1.1%

7. NVIDIA Corp. (NVDA): 0.3%

8. Apple Inc. (AAPL): 1.5%

9. Microsoft Corp. (MSFT): 1.5%

10. Nokia Corp. (NOK): 4%

11. Garmin Ltd (GRMN): 2.6%

12. Badger Meter Inc. (BMI): 1.1%

F-Ranked Retirement Suitability 1. Logitech Intl. SA (LOGI): 1.7%

2. Sony Corp. (SNE): 0.6%

3. Accenture plc (ACN): 1.6%

4. Telefonaktiebolaget LM Ericsson (ERIC): 1.1%

5. Kulicke & Soffa Industries Inc. (KLIC): 2%

Utilities A-Ranked Retirement Suitability 1. Fortis Inc. (FTS.TO): 3.6%

2. Black Hills Corp. (BKH): 2.8%

3. Consolidated Edison Inc. (ED): 3.5%

B-Ranked Retirement Suitability 1. AmeriGas Partners LP (APU): 10.8%

2. Suburban Propane Partners LP (SPH): 10.5%

3. Edison International (EIX): 3.9%

4. The Southern Co. (SO): 4.6%

5. UGI Corp. (UGI): 2%

6. SJW Grp. (SJW): 1.9%

7. PPL Corp. (PPL): 5.2%

8. Atmos Energy Corp. (ATO): 2.1%

9. Connecticut Water Service Inc. (CTWS): 1.8%

10. Northwest Natural Holding Co. (NWN): 3%

11. Entergy Corp. (ETR): 3.8%

12. Middlesex Water Co. (MSEX): 1.8%

13. American States Water Co. (AWR): 1.6%

C-Ranked Retirement Suitability 1. Spark Energy Inc. (SPKE): 7.8%

2. Brookfield Infra. Partners LP (BIP): 4.9%

3. Brookfield Renewable Partners LP (BEP): 6.5%

4. Sempra Energy (SRE): 3%

5. Dominion Energy Inc. (D): 4.5%

6. CenterPoint Energy Inc. (CNP): 3.8%

7. American Electric Power Co. Inc. (AEP): 3.2%

8. Duke Energy Corp. (DUK): 4.1%

9. DTE Energy Co. (DTE): 3.1%

10. NextEra Energy Inc. (NEE): 2.6%

11. Aqua America Inc. (WTR): 2.4%

12. MGE Energy Inc. (MGEE): 2%

13. California Water Service Grp. (CWT): 1.6%

D-Ranked Retirement Suitability 1. Consolidated Water Co. Ltd (CWCO): 2.7%

2. Otter Tail Corp. (OTTR): 2.8%


39

This information is not personalized advice. It is for informational purposes only. Please see disclaimer at end of newsletter for more.

Past Recommendations, Ranking Criteria, & Sells

Ranking Criteria The ranking criteria for the Top 10 list and requirements for inclusion in The Sure

Retirement Newsletter are derived from The Sure Analysis Research Database.

Specifically, our Top 10 is made up of A (and B if necessary) ranked Retirement

Suitability Score securities with 4%+ yields and strong expected total returns. See

Buying & Ranking Criteria a few pages below for the ranking criteria details.

Sell Rules Sell Rule #1, Dividend-Based Sell Rules: Any past recommendation that reduces

or eliminates its dividend is automatically a pending sell. We review and analyze

these stocks to determine when to initiate the final sale. Secondly, any past

recommendation that has an “F” Dividend Risk Score is automatically reviewed

for safety and a sell may be issued. We will only recommend selling up to two

securities a month so that the reinvestment of sale proceeds is not concentrated in a

short time frame.

Sell Rule #2, Valuation-Based Sell Rules: Sell past recommendations with

expected total returns below the expected total returns of the S&P 500 over the

next several years. This sell rule replaces our previous valuation-based sell rule of

selling recommendations trading below 2/3 of their historical average dividend

yield. This new valuation-based sell rule goes into effect in this January 2019

edition of The Sure Retirement Newsletter. We calculate our estimate of the long-

term returns of the S&P 500 as the S&P 500’s dividend yield plus nominal (not

inflation adjusted) GDP growth, less valuation multiple mean reversion over 10

years. We currently estimate long-term U.S. nominal GDP growth at 5.5%, the

S&P 500’s dividend yield at 1.9%, and valuation multiple mean reversion at -3.1%

(S&P 500 fair value P/E of 15.7 versus current P/E of 21.6) for an expected total

return sell threshold of 4.3%. Past recommendations at or below this sell threshold

are bolded and in green in the current holds table below. We will only

recommend up to two valuation-based sells a month; and fewer if there are sells

based on the first sell rule.

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Current Holds11 Name Ticker 1st Rec. Date DR Score Total Return Exp. Annual TR

Omega Healthcare OHI 11/7/2016 D 45.7% 12.1%

Enterprise Product EPD 11/7/2016 B 37.2% 9.7%

Energy Transfer ET 11/7/2016 C 29.3% 13.9%

Urstadt Biddle UBA 11/7/2016 C 12.1% 7.2%

Magellan Midstream MMP 11/7/2016 D 8.2% 14.9%

AT&T T 11/7/2016 B 0.0% 14.4%

Kohl's KSS 5/8/2017 C 93.2% 10.0%

Sunoco SUN 5/8/2017 D 25.2% 19.2%

Macy's M 5/8/2017 D -4.4% 15.1%

Occidental Petroleum OXY 6/5/2017 D 18.9% 9.1%

Royal Dutch Shell RDS.B 7/3/2017 D 33.4% 13.8%

Target TGT 11/6/2017 A 43.8% 8.8%

ONEOK OKE 1/8/2018 F 32.9% 10.8%

Altria MO 5/14/2018 C 8.2% 12.4%

Invesco IVZ 5/14/2018 C -22.7% 15.3%

STAG Industrial STAG 10/15/2018 F 17.8% 9.9%

Verizon VZ 10/15/2018 C 11.8% 10.5%

Western Union WU 10/15/2018 C 8.1% 8.9%

IBM IBM 11/12/2018 B 20.6% 11.7%

Leggett & Platt LEG 11/12/2018 A 19.8% 10.8%

General Mills GIS 11/12/2018 C 15.4% 7.4%

People's United PBCT 11/12/2018 B 10.2% 11.5%

AbbVie ABBV 11/12/2018 A -8.2% 21.4%

Qualcomm QCOM 12/10/2018 C -0.1% 6.6%

Hanesbrands HBI 1/14/2019 B 34.3% 10.9%

Cardinal Health CAH 1/14/2019 B 0.8% 18.0%

Newell Brands NWL 1/14/2019 C -23.1% 18.4%

Western Digital WDC 2/11/2019 B 13.7% 13.8%

WestRock WRK 2/11/2019 B 6.1% 15.4%

Tanger Factory Outlet SKT 4/15/2019 B N/A 18.8%

11 This does not include our past “special recommendations” (which we don’t track sells for) because they are

outside the scope of the regular Sure Retirement Newsletter strategy. Total return data is calculated using the

closing price from the first trading day after the first recommendation date, and data from morning 4/12/19.

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Sold Positions Name & Ticker Recommend Date Status Total Return12

Waddell & Reed Financial (WDR) November 2016 Sold 11/6/17 34.4%

Gladstone Investment (GAIN) February 2017 Sold 7/9/18 49.7%

R.R. Donnelly & Sons (RRD) June 2018 Sold 8/13/18 -28.2%

Vector Grp. (VGR) August 2017 Sold 12/10/18 -35.1%

New Residential (NRZ) October 2018 Sold 12/10/18 -7.7%

Spectra Energy Partners (SEP) November 2016 Sold 1/14/1913 9.6%

Holly Energy Partners (HEP) December 2016 Sold 1/14/19 6.9%

Welltower (WELL) January 2018 Sold 2/11/19 31.1%

Senior Housing Properties (SNH) February 2018 Sold 3/11/19 -16.0%

W.P. Carey (WPC) February 2017 Sold 3/11/19 37.7%

AmeriGas Partners (APU) January 2017 Sell 4/15/19 -8.1%

TC PipeLines (TCP) December 2016 Sell 4/15/19 -15.6%

Pending Sells Name & Ticker Recommend Date Status Total Return

Genesis Energy (GEL) November 2016 See notes14 -18.7%

Buckeye Partners (BPL) November 2016 See notes15 -34.4%

Suburban Propane Partners (SPH) July 2017 See notes 16 4.8%

Owens & Minor (OMI) November 2017 See notes17 -74.6%

L Brands (LB) August 2018 See notes18 -13.3%

Kraft Heinz (KHC) October 2018 See notes19 -39.7%

12 Total returns start with the market close price of the first trading day after the newsletter recommendation. Prior

to March 2018, this was the first trading day after the first Sunday of the month. As of March 2018, and later, this is

the first trading day after the second Sunday of the month. Closing price data is from morning 4/12/19. 13 Sold shares of ENB which were obtained when ENB acquired SEP. 14 Sell at historical average yield of 6.5%, currently at 9.7%. 15 Sell when price-to-cash-flow ratio hits our fair value estimate of 9.0. It is currently at 7.8. 16 Sell at historical average yield of 8.7%, currently at 10.4%. 17 Sell when P/E ratio hits our fair value estimate of 10.0. It is currently at 5.7. 18 Sell when P/E ratio hits our fair value estimate of 13.0. It is currently at 11.0. 19 Sell when P/E ratio hits our fair value estimate of 11.0. It is currently at 9.0.

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Buying & Ranking Criteria

The method we use to come up with the Top 10 buys for The Sure Retirement

Newsletter is as follows:

Note: Ranking data is from Wednesday’s Sure Analysis data update.

1. Filter our Sure Analysis Research Database universe of securities for:

- 10%+ Expected Total Returns

- Dividend Yield of 4%+

- Retirement Suitability Score of A

- Dividend Risk Score of C or higher

- U.S. securities only

- All companies must have dividend covered by free cash flow

2. Sort by Expected Total Return (highest first)

3. No more than 3 REITs and 3 MLPs in each newsletter

4. Veto any securities from Top 10 as necessary after qualitative analysis

5. The Top 10 is the 10 highest Expected Total Return securities from steps 1

through 4 above

Dividend Risk Scores are sorted into quintiles (A is top 20%, B is top 40%, C is top 6%,

and so on) based on the formula below:

Dividend Risk Score (Raw) = Payout Ratio x 100 – # Years of Steady or Rising

Dividends + 50 if deemed risky during a recession

Only the top 10% of securities in our Sure Analysis Research Database receive an “A”

Retirement Suitability Score, using the following formula:

Retirement Suitability Score (Raw) = (1 – Dividend Risk Score Percentile) + Dividend

Yield Percentile

Our formula for Expected Total Return is calculated as the sum of 5-year expected

returns from growth on a per share basis, 5-year expected returns from valuation multiple

changes, and the current dividend yield.

The combination of a high Retirement Suitability Score with high Expected Total Returns

means The Sure Retirement Newsletter looks for high yielding securities with strong total

return potential and good or better safety scores.

Note that our Expected Total Returns are based on the idea that the economy will

continue forward ‘as is’ for the foreseeable future, and not hit a recession. Recessions

happen, of course, and we seek to recommend securities likely to pay steady or rising

dividends during recessions. Recession safety factors into our Dividend Risk Scores, and

in turn our rankings for The Sure Retirement Newsletter.

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Portfolio Building Guide

The process of building a high-yield dividend portfolio is straightforward: Each month invest

in the top-ranked security in which you own the smallest dollar amount out of the Top 10.

Over time, you will build a well-diversified portfolio of quality businesses purchased when they

yield 4% or more. If your portfolio has 25% or more allocated to one sector, buy the highest

ranked security not in that sector. Alternatively, the Top 10 list is also useful as an idea

generation tool for those with a different portfolio allocation plan.

Examples Portfolio 1 Portfolio 2

Ticker Name Amount Ticker Name Amount

ABBV AbbVie Inc. $ 1,002 ABBV AbbVie Inc. $ 4,374

SKT Tanger Factory Outlet $ - SKT Tanger Factory Outlet $ 4,878

CAH Cardinal Health $ - CAH Cardinal Health $ 5,374

IVZ Invesco Ltd. $ - IVZ Invesco Ltd. $ 4,353

WRK WestRock Company $ - WRK WestRock Company $ 7,312

T AT&T Inc. $ - T AT&T Inc. $ 2,799

ET Energy Transfer LP $ - ET Energy Transfer LP $ 2,952

MO Altria Group $ - MO Altria Group $ 6,660

IBM IBM Corp. $ - IBM IBM Corp. $ 2,367

PBCT People’s United Financial $ - PBCT People’s United Financial $ 2,818

- If you had portfolio 1, you would buy SKT, the top-ranked security you own least.

- If you had portfolio 2, you would buy IBM, the top-ranked security you own least.

If you have an existing portfolio or a large lump sum to invest, switch over to The Sure

Retirement Strategy over 20 months. Each month take 1/20 of your initial portfolio value and

buy the top-ranked security you own the least out of the Top 10 (if that sector makes up less than

25% of your portfolio). When you sell a security, use the proceeds to purchase the top-ranked

security you own the least.

This simple investing process will build a diversified portfolio of high-quality dividend or

distribution securities over a period of less than 2 years. There’s nothing magical about 20

months. A period of 15 months or 30 months will yield similar results.

If your portfolio grows too large to manage comfortably (for example, you are not comfortable

holding 40+ securities – which would happen after around 4 years of the Sure Dividend System),

you will need to sell holdings. I recommend eliminating positions that have the lowest yields.

You can combine recommendations from The Sure Retirement, The Sure Dividend, and The Sure

Dividend International Newsletters by targeting a specific yield for your overall portfolio. When

you need your portfolio yield to increase, invest from The Sure Retirement Newsletter. If less

yield is required (and growth is preferred), invest from The Sure Dividend Newsletter. The Sure

Dividend International Newsletter can be used for international diversification.

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Tax Guide There are 4 broad types of investment vehicles covered in The Sure Retirement Newsletter:

1. Corporations

2. Master Limited Partnerships (MLPs)

3. Real Estate Investment Trusts (REITs)

4. Business Development Companies (BDCs)

The organization form is important for tax purposes because it determines how efficiently a

company can return money to unit or shareholders. An example is below.

Imagine a company makes $10, pre-tax, and distributes 100% to investors. The image below

shows how much of the $10 would go to investors using standard assumptions for the three

investment vehicles:

Notes: Tax treatment for BDCs and REITs is similar. BDCs have been omitted from the

images below because of this. The image below takes into account the pass-through entity

tax breaks from Trump’s Tax Act, which will expire in 2025. The tables below assume that

80% of MLP distributions are returns of capital, and 20% are ordinary income. It assumes

that 70% of REIT payments are ordinary income; and capital gains and return of capital

each make up 15% of REIT payments.

• $6.32 in after-tax income from Corporation

• $7.45 in after-tax income from REIT

• $8.13 in after-tax income from MLP

The image below gives an overview of the different organizational forms:

https://www.forbes.com/sites/baldwin/2018/02/14/2018-tax-guide-to-mlps/#430e16cc400b

https://www.forbes.com/sites/baldwin/2018/02/14/2018-tax-guide-to-mlps/#430e16cc400b

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Corporations Corporations are taxed on income at the corporate level. They then pay out this after-tax

income to shareholders. Shareholders are then taxed again at the individual level.

Note: The United States corporate tax rate (including the state and federal levels) is 26%

after the Tax Cuts and Jobs Act. The global average is 23%, for comparison.

Corporations issue a 1099 to track dividend payments to shareholders. They are the simplest

and most common type of investment. They are also the least tax-advantaged.

Given the choice, corporations should be held in a retirement account to minimize taxes. Of

course, owning them in a taxable account is fine, one will just be paying taxes on dividends

received. Capital gains taxes are only triggered when a common stock is sold, making it tax

advantageous to buy and hold.

Capital gains taxes are divided into two types: short-term and long-term. Short-term capital

gains tax applies to investments held for less than a year. The short-term capital gains rate is

your ordinary income tax rate. It ranges between 10% and 37% depending on your income

bracket.

Long-term capital gains apply to most types of investments (including Corporations, REITs,

and MLPs) held longer than 1 year. The maximum long-term capital gains tax rate is 20%.

The minimum is 0%. Most investors will fall into the 15% long-term capital gains tax

bracket.

Dividend taxes are also divided into two types: ordinary and qualified. Most dividends paid

from blue-chip dividend stocks are ‘qualified.’ The requirements for a dividend to be

classified as ‘qualified’ are below:

• The company must be a U.S. corporation, or a foreign corporation that readily trades

on major U.S. exchanges, or be incorporated in a U.S. territory.

• The investor must have held the stock for 60+ days before the ex-dividend date.

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Qualified dividends are taxed at the same rate as long-term capital gains; between 0% and

20% (though most investors will be in the 15% bracket). Ordinary dividends are dividends

that do not meet the criteria to be ‘qualified.’ Ordinary dividends are taxed at the ordinary

income tax rate.

Master Limited Partnerships (MLPs) MLPs are the most tax efficient vehicle for returning money to investors. They avoid the

double taxation issues of Corporations. MLPs are not taxed at the organization level.

Unfortunately, MLPs are also the most complicated.

Typically, somewhere around 80% to 90% of MLP distributions are considered a ‘return

of capital’ because of depreciation. You don’t pay taxes immediately on ‘return of

capital’ distributions.

Returns of capital reduce your cost basis in the MLP. You are not taxed until you sell the

units.

For example, imagine you buy 10 units of an MLP at $100 a unit for a total investment of

$1,000. Now imagine you hold for 5 years.

The MLP unit price has increased to $120. Your investment is now worth $1,200. It also

paid out $37.50 per unit in distributions over this time, with 80% of that being a return of

capital ($37.50 x 80% = $30 return of capital).

The 20% of distributions that were not returns of capital would be taxed at your ordinary

income tax rate, which is up to 37%. These taxes would be due the year they are accrued.

Your cost basis would be $700 (initial investment amount of $1,000 less return of capital

of $30 per unit or $300 total). The amount of long-term capital gains tax you owe

(assuming you are in the 20% tax bracket) is $100.

Math Behind Example: Sale price of $1,200 less cost basis of $700 = $500 in capital

gains. $500 in capital gains x 20% tax bracket = $100.

As a caveat, if the cost basis ever falls below 0 (which will only happen after holding for

around a decade or more), you will owe long-term capital gains tax on the amount the

cost basis is below 0 every year.

Return of capital and other issues discussed above do not matter when MLPs are held in a

retirement account.

There is a different issue with holding MLPs in a retirement account, however. This

includes 401(k), IRA, and Roth IRA accounts, among others.

When retirement plans conduct or invest in a business activity, they must file separate tax

forms to report Unrelated Business Income (UBI) and may owe Unrelated Business

Taxable Income (UBTI). UBTI tax brackets go up to 37% (the top personal rate).

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MLPs issue K-1 forms for tax reporting. K-1s report business income, expense, and loss

to owners. Therefore, MLPs held in retirement accounts may still qualify for taxes.

If UBI for all holdings in your retirement account is over $1,000, you must have your

retirement account provider (typically, your brokerage) file Form 990-T. You will want

to file form 990-T as well if you have a UBI loss to get a loss carryforward for

subsequent tax years. Failure to file form 990-T and pay UBIT can lead to severe

penalties. Fortunately, UBIs are often negative. It is a fairly rare occurrence to owe

taxes on UBI.

The subject of MLP taxation can be complicated and confusing. Hiring a tax

professional to aid in preparing taxes is a viable option for dealing with the complexity.

The bottom line is this: MLPs are tax-advantaged vehicles that are suited for investors

looking for current income. It is fine to hold them in either taxable or non-taxable

(retirement) accounts. Since retirement accounts are already tax-deferred, holding MLPs

in taxable accounts allows you to ‘get credit’ for the full effects of their unique structure.

Real Estate Investment Trusts (REITs) Like MLPs, REITs avoid double taxation. REITs are not taxed at the organization level.

REITs are in between MLPs and Corporations in terms of both complexity and tax-

advantages. REITs are required to pay out 90%+ of their income.

REITs are organized as trusts. As a result, ‘shareholders’ are actually unit holders.

REITs issue 1099 forms (just like corporations) instead of K-1 forms (like MLPs do).

Unit holders receive distributions, not dividends (just like MLPs). REIT distributions fall

into three categories:

• Ordinary income

• Return of capital

• Capital gains

Ordinary income is taxed at your ordinary income tax rate; up to 37%. Return of capital

reduces your cost basis (just as it does with MLPs). Capital gains are taxed at either

short-term or long-term capital gains rates.

The percentage of distributions from these three sources varies by REIT. In general,

ordinary income tends to be the majority of the distribution. Expect around 70% of

distributions as ordinary income, 15% as a return of capital, and 15% as capital gains.

REITs are best suited for retirement accounts because the majority of their payments are

taxed as ordinary income. Retirement accounts remove this negative and make REITs

very tax advantageous.

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This doesn’t mean you should never own a REIT in a taxable account. A good

investment is a good investment, regardless of tax issues. If you have the choice, REITs

should definitely be placed in a retirement account such as an IRA or 401k.

Business Development Companies (BDCs) Much like REITs, business development companies must pay out 90%+ of their income

as distributions. Additionally, business development companies must derive 90% of their

gross income from interest, dividends, or capital gains on securities.

BDCs pay their distributions as a mix of:

• Ordinary income & non-qualified dividends

• Qualified dividends

• Return of capital

• Capital gains

Just as with MLPs, returns of capital reduce your tax basis. Qualified dividends and

long-term capital gains are taxed at lower rates, while ordinary income and non-qualified

dividends are taxed at your personal income tax bracket rate.

Unfortunately, 70% to 80% of BDC income is typically derived from ordinary income.

Because of this, they make excellent vehicles for tax-advantaged retirement accounts

such as an IRA or 401k.

Please email us at [email protected] with any questions you have on taxes

regarding retirement accounts, MLPs, REITs, and BDCs. Frequently asked questions

will be added to this tax guide.

As a newsletter provider, we can’t provide specific personal investment advice, only

general information.

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Disclaimer

Nothing presented herein is, or is intended to constitute, specific investment advice. Nothing in this newsletter should be construed as a recommendation to follow any investment strategy or allocation. Any forward-looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements

or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. While Sure Dividend has used reasonable efforts to

obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability or completeness of third-party information presented herein. No guarantee of investment performance is being provided and no inference to the contrary should be made. There is a risk of loss from an investment in securities.

Past performance is not a guarantee of future performance.

Glossary of Common Terms & Acronyms

Adjusted Funds From Operations (AFFO): A term used to describe Funds From Operations (FFO),

plus non-recurring items that do not impact the long-term fundamentals of the business. See FFO in

this glossary for more.

Cash Available for Distribution (CAD): This term is also referred to as funds available for

distribution (FAD). It is the cash available to be distributed to unitholders. It is most commonly seen

with REITs. CAD is calculated by subtracting recurring capital expenditures from funds from

operations.

Distributable Cash Flow (DCF): A non-GAAP (Generally Accepted Accounting Principles)

financial metric frequently utilized by Master Limited Partnerships as an alternative to earnings-per-

share. Expresses cash available for unitholder distributions, after payments to the General Partner.

Calculated by adding non-cash items, such as depreciation and one-time expenses, to net income.

Viewed as a better gauge of financial health than earnings-per-share, as MLPs operate asset-heavy

business models with significant depreciation expenses.

Dividend Yield: The annual dividend returns from an investment, expressed as a percentage. The

dividend yield is calculated from the annual dividend per share, divided by the stock price per share.

MLPs and REITs pay distributions, not dividends. Distribution yield is used for them instead of

dividend yield, though some companies (notably REITs) call it a dividend for ease of understanding by

the public.

Dividend Payout Ratio: The percentage of earnings paid to shareholders as a dividend. The payout

ratio is calculated from the annual dividend per share, divided by annual earnings-per-share. For MLPs

and REITs, this is typically expressed as the distribution coverage ratio.

EBITDA: Earnings before interest, taxes, depreciation, and amortization. Used by companies with

high levels of depreciation and interest costs, such as MLPs, to indicate the financial health of a

business. A similar metric to operating cash flow. Frequently used as part of leverage ratios such as

debt-to-EBITDA.

Funds From Operations (FFO): A non-GAAP financial metric frequently utilized by Real Estate

Investment Trusts, as an alternative to earnings-per-share. FFO is calculated by adding depreciation

and amortization expenses to net income, minus any gains on asset sales. REITs view FFO as a more

accurate gauge of financial health, since earnings-per-share are heavily impacted by depreciation and

amortization expenses.

GAAP: Generally accepted accounting principles. These are legally required, standardized accounting

rules and procedures used when preparing financial statements.

If you read a term in The Sure Retirement Newsletter not on this list with which you are unfamiliar,

please email [email protected]. We will explain the term and add it to the glossary in next

month’s edition.

april 2019 edition - sure dividend · 6 return to top 10 list the retirement top 10 – april 2019...

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